Only 3 Days Left To Speedy Hire Plc (LSE:SDY)’s Ex-Dividend Date, Should You Buy?

If you are interested in cashing in on Speedy Hire Plc's (LSE:SDY) upcoming dividend of £0.01 per share, you only have 3 days left to buy the shares before its ex-dividend date, 14 December 2017, in time for dividends payable on the 26 January 2018. Should you diversify into SDY and boost your portfolio income stream? Well, keep on reading because today, I'm going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for SDY

5 checks you should use to assess a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is their annual yield among the top 25% of dividend payers?
• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
• Has dividend per share amount increased over the past?
• Is is able to pay the current rate of dividends from its earnings?
• Will it have the ability to keep paying its dividends going forward?

Does Speedy Hire pass our checks?

The company currently pays out 53.31% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect SDY's payout to fall to 38.19% of its earnings, which leads to a dividend yield of around 3.09%. However, EPS should increase to £0.04, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Not only have dividend payouts from Speedy Hire 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. Relative to peers, SDY generates a yield of 1.77%, which is on the low-side for trade distributors stocks.

What this means for you:

Are you a shareholder? You may be wondering why Speedy Hire is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be valuable exploring other dividend stocks as alternatives to SDY or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? After digging a little deeper into SDY's yield, it's easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, SDY could still be an interesting investment opportunity. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Take a look at our latest free fundmental analysis to explore other aspects of SDY.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.