On the 15 June 2018, Computer Modelling Group Ltd (TSX:CMG) will be paying shareholders an upcoming dividend amount of CA$0.1 per share. However, investors must have bought the company's stock before 06 June 2018 in order to qualify for the payment. That means you have only 3 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding Computer Modelling Group can impact your portfolio income stream, by analysing the stock's most recent financial data and dividend attributes. Check out our latest analysis for Computer Modelling Group
Here's how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share risen in the past couple of years?
- 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?
How does Computer Modelling Group fare?The company currently pays out 153.89% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. Going forward, analysts expect CMG's payout to reduce to 121.99% of its earnings, which leads to a dividend yield of 4.16%. However, EPS should increase to CA$0.28, 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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. In terms of its peers, Computer Modelling Group generates a yield of 4.16%, which is high for Energy Services stocks but still below the market's top dividend payers.
Now you know to keep in mind the reason why investors should be careful investing in Computer Modelling Group for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three relevant factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CMG’s future growth? Take a look at our free research report of analyst consensus for CMG’s outlook.
- Valuation: What is CMG 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 CMG is currently mispriced by the market.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
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.