Investors who want to cash in on CI Financial Corp’s (TSX:CIX) upcoming dividend of CA$0.12 per share have only 3 days left to buy the shares before its ex-dividend date, 27 April 2018, in time for dividends payable on the 15 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine CI Financial’s latest financial data to analyse its dividend characteristics. See our latest analysis for CI Financial
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does CI Financial fare?CI Financial has a trailing twelve-month payout ratio of 73.79%, which means that the dividend is covered by earnings. However, going forward, analysts expect CIX’s payout to fall to 56.18% of its earnings, which leads to a dividend yield of 5.46%. However, EPS should increase to CA$2.37, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. Dividend payments from CI Financial have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends. Relative to peers, CI Financial has a yield of 5.27%, which is high for Capital Markets stocks.
Keeping in mind the dividend characteristics above, CI Financial is definitely worth considering for investors looking to build a dedicated income portfolio. 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. There are three key factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for CIX’s future growth? Take a look at our free research report of analyst consensus for CIX’s outlook.
- Valuation: What is CIX worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CIX is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.