Stock Analysis

Only 3 Days Left Before Supply Network Limited (ASX:SNL) Will Start Trading Ex-Dividend, Is It Worth Buying?

ASX:SNL
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Investors who want to cash in on Supply Network Limited's (ASX:SNL) upcoming dividend of A$0.06 per share have only 3 days left to buy the shares before its ex-dividend date, 21 March 2018, in time for dividends payable on the 05 April 2018. Is this future income a persuasive enough catalyst for investors to think about Supply Network as an investment today? Below, I'm going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for Supply Network

5 checks you should use to assess a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

  • Is its annual yield among the top 25% of dividend-paying companies?
  • Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
  • Has dividend per share amount increased over the past?
  • Is its earnings sufficient to payout dividend at the current rate?
  • Will the company be able to keep paying dividend based on the future earnings growth?

ASX:SNL Historical Dividend Yield Mar 17th 18
ASX:SNL Historical Dividend Yield Mar 17th 18

Does Supply Network pass our checks?

Supply Network has a trailing twelve-month payout ratio of 59.03%, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you're eyeing out is reliable in its payments. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. Relative to peers, Supply Network generates a yield of 3.24%, which is high for Retail Distributors stocks but still below the market's top dividend payers.

Next Steps:

Taking all the above into account, Supply Network is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. Below, I've compiled three key factors you should further research:

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.