Shares of Mediaset España Comunicación, S.A. (BME:TL5) will begin trading ex-dividend in 2 days. To qualify for the dividend check of €0.25 per share, investors must have owned the shares prior to 26 April 2019, which is the last day the company's management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Mediaset España Comunicación's latest financial data to analyse its dividend characteristics.
Here's how I find good dividend stocks
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Does it pay an annual yield higher than 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share risen in the past couple of years?
- Does earnings amply cover its dividend payments?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Mediaset España Comunicación fit our criteria?
The company currently pays out 82% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 84% which, assuming the share price stays the same, leads to a dividend yield of 7.6%. Moreover, EPS is forecasted to fall to €0.61 in the upcoming year.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. Not only have dividend payouts from Mediaset España Comunicación fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.
In terms of its peers, Mediaset España Comunicación generates a yield of 8.9%, which is high for Media stocks.
Considering the dividend attributes we analyzed above, Mediaset España Comunicación 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. I've put together three important factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for TL5’s future growth? Take a look at our free research report of analyst consensus for TL5’s outlook.
- Valuation: What is TL5 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 TL5 is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Mediaset España Comunicación
Mediaset España Comunicación, S.A., together with its subsidiaries, engages in the television broadcasting business in Spain.
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Undervalued with excellent balance sheet.