If you are interested in cashing in on Torstar Corporation’s (TSX:TS.B) upcoming dividend of CA$0.03 per share, you only have 3 days left to buy the shares before its ex-dividend date, 08 March 2018, in time for dividends payable on the 30 March 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Torstar can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Torstar
5 checks you should do on a dividend stock
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 the amount of dividend per share grown over the past?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does Torstar fare?The current payout ratio for TS.B is negative, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from Torstar 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, Torstar has a yield of 5.81%, which is high for Media stocks.
After digging a little deeper into Torstar’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. There are three relevant aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for TS.B’s future growth? Take a look at our free research report of analyst consensus for TS.B’s outlook.
- Valuation: What is TS.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 TS.B 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.