Attention dividend hunters! Aspo Oyj (HEL:ASPO) will be distributing its dividend of €0.22 per share on the 05 November 2018, and will start trading ex-dividend in 4 days time on the 26 October 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Aspo Oyj can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- 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 dividend per share risen in the past couple of years?
- Can it afford to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does Aspo Oyj fare?
Aspo Oyj has a trailing twelve-month payout ratio of 73%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 48%, leading to a dividend yield of 4.7%. However, EPS should increase to €0.80, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although ASPO’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Compared to its peers, Aspo Oyj produces a yield of 4.2%, which is high for Industrials stocks but still below the market’s top dividend payers.
With these dividend metrics in mind, I definitely rank Aspo Oyj as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. There are three relevant aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for ASPO’s future growth? Take a look at our free research report of analyst consensus for ASPO’s outlook.
- Valuation: What is ASPO 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 ASPO 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.