Should Income Investors Buy Distribuidora Internacional de Alimentación SA (BME:DIA) Before Its Ex-Dividend?

Shares of Distribuidora Internacional de Alimentación SA (BME:DIA) will begin trading ex-dividend in 2 days. To qualify for the dividend check of €0.15 per share, investors must have owned the shares prior to 13 July 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. What does this mean for current shareholders and potential investors? Below, I will explain how holding Distribuidora Internacional de Alimentación can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Distribuidora Internacional de Alimentación

Here’s how I find good dividend stocks

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?
  • Does it consistently pay out dividends without missing a payment of significantly cutting payout?
  • Has it increased its dividend per share amount over the past?
  • Is is able to pay the current rate of dividends from its earnings?
  • Will it be able to continue to payout at the current rate in the future?

BME:DIA Historical Dividend Yield July 10th 18
BME:DIA Historical Dividend Yield July 10th 18

How well does Distribuidora Internacional de Alimentación fit our criteria?

Distribuidora Internacional de Alimentación has a trailing twelve-month payout ratio of 84.07%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 51.98%, leading to a dividend yield of around 6.23%. However, EPS should increase to €0.23, 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. The reality is that it is too early to consider Distribuidora Internacional de Alimentación as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Relative to peers, Distribuidora Internacional de Alimentación produces a yield of 6.84%, which is high for Consumer Retailing stocks.

Next Steps:

Considering the dividend attributes we analyzed above, Distribuidora Internacional de Alimentación is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three key factors you should further research:

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