Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. TINC Comm VA (EBR:TINC) has returned to shareholders over the past 2 years, an average dividend yield of 4.00% annually. Does TINC Comm. VA tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for TINC Comm. VA
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share risen in the past couple of years?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
How does TINC Comm. VA fare?
TINC Comm. VA has a trailing twelve-month payout ratio of 30.08%, which means that the dividend is covered by earnings. Going forward, analysts expect TINC’s payout to increase to 83.78% of its earnings, which leads to a dividend yield of around 4.12%. However, EPS is forecasted to fall to €0.75 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider TINC Comm. VA as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, TINC Comm. VA generates a yield of 3.98%, which is high for Capital Markets stocks but still below the market’s top dividend payers.Next Steps:
If you are building an income portfolio, then TINC Comm. VA is a complicated choice since it has some positive aspects as well as negative ones. 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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three relevant aspects you should further research:
- Historical Performance: What has TINC’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on TINC Comm. VA’s board and the CEO’s back ground.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.