Why Standard Life Aberdeen plc (LON:SLA) Should Be In Your Portfolio

Standard Life Aberdeen plc (LON:SLA) has pleased shareholders over the past 10 years, paying out an average dividend of 6.00% annually. The stock currently pays out a dividend yield of 6.13%, and has a market cap of UK£10.22b. Let's dig deeper into whether Standard Life Aberdeen should have a place in your portfolio. View out our latest analysis for Standard Life Aberdeen

How I analyze a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five 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 it increased its dividend per share amount over the past?
• Can it afford to pay the current rate of dividends from its earnings?
• Will it have the ability to keep paying its dividends going forward?

How does Standard Life Aberdeen fare?

The company currently pays out 71.40% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect SLA's payout to remain around the same level at 76.30% of its earnings, which leads to a dividend yield of 6.98%. In addition to this, EPS is forecasted to fall to £0.22 in the upcoming year.

If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

In terms of its peers, Standard Life Aberdeen produces a yield of 6.13%, which is high for Diversified Financial stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Standard Life Aberdeen 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 pertinent factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for SLA’s future growth? Take a look at our free research report of analyst consensus for SLA’s outlook.
2. Valuation: What is SLA 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 SLA is currently mispriced by the market.
3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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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.