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Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Recently, Vente-Unique.com SA (EPA:ALVU) has started paying dividends to shareholders. Today it yields 3.1%. Should it have a place in your portfolio? Let’s take a look at Vente-Unique.com in more detail.
View our latest analysis for Vente-Unique.com
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 it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
How does Vente-Unique.com fare?
Vente-Unique.com has a trailing twelve-month payout ratio of 53%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 49% which, assuming the share price stays the same, leads to a dividend yield of around 5.9%.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Vente-Unique.com as a dividend investment. Last year was the company’s first dividend payment, so it is certainly early days. The standard practice for reliable payers is to look for 10 or so years of track record.
In terms of its peers, Vente-Unique.com generates a yield of 3.1%, which is high for Online Retail stocks but still below the market’s top dividend payers.
Next Steps:
Taking all the above into account, Vente-Unique.com is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. Below, I’ve compiled three key factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for ALVU’s future growth? Take a look at our free research report of analyst consensus for ALVU’s outlook.
- Valuation: What is ALVU 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 ALVU 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 editorial-team@simplywallst.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. On rare occasion, data errors may occur. Thank you for reading.