Is Buying Quarterhill Inc (TSX:QTRH) For Its Upcoming $0.01 Dividend A Good Choice?

Have you been waiting for Quarterhill Inc's (TSX:QTRH) upcoming dividend of $0.01 per share? Then you only have to wait 3 more days before the stock pays out on 05 January 2018, and starts trading ex-dividend on the 14 December 2017. So if you want to cash in on QTRH's dividend payment and are not yet a shareholder, you have only few days left! Today I am going to take a look at QTRH's most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for QTRH

5 questions I ask before picking a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is it paying an annual yield above 75% of dividend payers?
• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
• Has dividend per share amount increased over the past?
• Does earnings amply cover its dividend payments?
• Will it be able to continue to payout at the current rate in the future?

How does Quarterhill fare?

The current payout ratio for the stock is 14.68%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Quarterhill as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, QTRH generates a yield of 3.00%, which is high for communications equipment stocks but still below the market's top dividend payers.

What this means for you:

Are you a shareholder? You may be wondering why Quarterhill is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be valuable exploring other dividend stocks as alternatives to QTRH or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? After digging a little deeper into QTRH'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, QTRH could still be offering some interesting investment opportunities. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Take a look at our latest free fundmental analysis to explore other aspects of QTRH.

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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.