Have you been keeping an eye on Stock Spirits Group plc’s (LSE:STCK) upcoming dividend of €0.06 per share payable on the 25 May 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 03 May 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Stock Spirits Group can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for Stock Spirits Group
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it the top 25% annual dividend yield payer?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does Stock Spirits Group pass our checks?The current trailing twelve-month payout ratio for STCK is 141.64%, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 47.06%, leading to a dividend yield of 2.66%. In addition to this, EPS should increase to €0.18, 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. The reality is that it is too early to consider Stock Spirits Group as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Stock Spirits Group produces a yield of 2.66%, which is high for Beverage stocks but still below the market’s top dividend payers.
Now you know to keep in mind the reason why investors should be careful investing in Stock Spirits Group for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three fundamental factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for STCK’s future growth? Take a look at our free research report of analyst consensus for STCK’s outlook.
- Valuation: What is STCK 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 STCK 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.