Only 6 Days Left Before New Flyer Industries Inc (TSE:NFI) Will Start Trading Ex-Dividend, Should Investors Buy?

Have you been keeping an eye on New Flyer Industries Inc's (TSX:NFI) upcoming dividend of $0.33 per share payable on the 15 January 2018? Then you only have 6 days left before the stock starts trading ex-dividend on the 28 December 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into New Flyer Industries's latest financial data to analyse its dividend attributes. See our latest analysis for New Flyer Industries

Here's how I find good dividend stocks

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is it paying an annual yield above 75% of dividend payers?
• Does it consistently pay out dividends without missing a payment of significantly cutting payout?
• Has dividend per share amount increased over the past?
• Can it afford to pay the current rate of dividends from its earnings?
• Will it have the ability to keep paying its dividends going forward?

How does New Flyer Industries fare?

The current payout ratio for the stock is 34.87%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 41.91%, leading to a dividend yield of around 2.62%. However, EPS is forecasted to fall to $2.52 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 New Flyer Industries as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, New Flyer Industries generates a yield of 3.08%, which is on the low-side for machinery stocks.

What this means for you:

Are you a shareholder? If New Flyer Industries is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be valuable exploring other income stocks as alternatives to New Flyer Industries or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? If you are building an income portfolio, then New Flyer Industries is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. As with all investments, 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. Dig deeping in our latest free fundmental analysis to explore other aspects of New Flyer Industries.

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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.