Read This Before Buying Shaw Communications Inc (TSE:SJR.B) For Its Upcoming $0.1 Dividend

Attention dividend hunters! Shaw Communications Inc (TSX:SJR.B) will be distributing its dividend of CA$0.1 per share on the 27 April 2018, and will start trading ex-dividend in 3 days time on the 12 April 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Shaw Communications's latest financial data to analyse its dividend attributes. See our latest analysis for Shaw Communications

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?
• Has it consistently paid a stable dividend without missing a payment or drastically 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?
• Will it have the ability to keep paying its dividends going forward?

Does Shaw Communications pass our checks?

Shaw Communications has a trailing twelve-month payout ratio of 101.58%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 83.01%, leading to a dividend yield of around 5.01%. In addition to this, EPS should increase to CA$1.26, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you're eyeing out is reliable in its payments. SJR.B has increased its DPS from CA$0.72 to CA$1.19 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes SJR.B a true dividend rockstar. Relative to peers, Shaw Communications has a yield of 4.85%, which is high for Media stocks but still below the market's top dividend payers.

Next Steps:

Taking into account the dividend metrics, Shaw Communications ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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 essential aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for SJR.B’s future growth? Take a look at our free research report of analyst consensus for SJR.B’s outlook.
2. Valuation: What is SJR.B 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 SJR.B is currently mispriced by the market.
3. Other 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.