Should Income Investors Buy Grammer AG (DB:GMM) Before Its Ex-Dividend?

On the 18 June 2018, Grammer AG (DB:GMM) will be paying shareholders an upcoming dividend amount of €1.25 per share. However, investors must have bought the company’s stock before 14 June 2018 in order to qualify for the payment. That means you have only 5 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Grammer’s latest financial data to analyse its dividend attributes. See our latest analysis for Grammer

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 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 it increased its dividend per share amount over the past?
  • 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?

DB:GMM Historical Dividend Yield June 8th 18
DB:GMM Historical Dividend Yield June 8th 18

How well does Grammer fit our criteria?

The current trailing twelve-month payout ratio for the stock is 50.34%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 32.00%, leading to a dividend yield of 2.29%. However, EPS should increase to €4.71, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. Relative to peers, Grammer has a yield of 1.93%, which is on the low-side for Auto Components stocks.

Next Steps:

Keeping in mind the dividend characteristics above, Grammer is definitely worth considering for investors looking to build a dedicated income portfolio. 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. I’ve put together three important aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for GMM’s future growth? Take a look at our free research report of analyst consensus for GMM’s outlook.
  2. Valuation: What is GMM 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 GMM 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.