Read This Before Buying Husky Energy Inc (TSE:HSE) For Its Upcoming $0.08 Dividend

Investors who want to cash in on Husky Energy Inc's (TSX:HSE) upcoming dividend of CA$0.08 per share have only 3 days left to buy the shares before its ex-dividend date, 01 June 2018, in time for dividends payable on the 03 July 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Husky Energy can impact your portfolio income stream, by analysing the stock's most recent financial data and dividend attributes. View our latest analysis for Husky Energy

Here's how I find good dividend stocks

When researching a dividend stock, I always follow the following screening criteria:

• Is their annual yield among the top 25% of dividend payers?
• Does it consistently pay out dividends without missing a payment of significantly cutting payout?
• Has the amount of dividend per share grown over the past?
• Can it afford to pay the current rate of dividends from its earnings?
• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

How well does Husky Energy fit our criteria?

The current trailing twelve-month payout ratio for the stock is 16.23%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect HSE's payout to increase to 27.84% of its earnings, which leads to a dividend yield of 1.67%. In addition to this, EPS should increase to CA$1.07. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. 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. Not only have dividend payouts from Husky Energy fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, Husky Energy produces a yield of 1.64%, which is on the low-side for Oil and Gas stocks.

Next Steps:

After digging a little deeper into Husky Energy's yield, it's easy to see why you should be cautious investing in the company just 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 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:

1. Future Outlook: What are well-informed industry analysts predicting for HSE’s future growth? Take a look at our free research report of analyst consensus for HSE’s outlook.
2. Valuation: What is HSE 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 HSE is currently mispriced by the market.
3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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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.