Have you been keeping an eye on Uponor Oyj’s (HEL:UPONOR) upcoming dividend of €0.25 per share payable on the 27 March 2019? Then you only have 3 days left before the stock starts trading ex-dividend on the 19 March 2019. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Uponor Oyj’s most recent financial data to examine its dividend characteristics in more detail.
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:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share risen in the past couple of years?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
Does Uponor Oyj pass our checks?
Uponor Oyj has a trailing twelve-month payout ratio of 71%, which means that the dividend is covered by earnings. Going forward, analysts expect UPONOR’s payout to remain around the same level at 64% of its earnings. Assuming a constant share price, this equates to a dividend yield of 5.6%. In addition to this, EPS should increase to €0.84.
When assessing the forecast sustainability of a dividend it is also worth considering 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’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from Uponor Oyj have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends.
Compared to its peers, Uponor Oyj has a yield of 4.9%, which is high for Building stocks but still below the market’s top dividend payers.
If you are building an income portfolio, then Uponor Oyj is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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 important factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for UPONOR’s future growth? Take a look at our free research report of analyst consensus for UPONOR’s outlook.
- Valuation: What is UPONOR 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 UPONOR is currently mispriced by the market.
- 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 firstname.lastname@example.org. 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.