A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. In the past 10 years Robinson plc (AIM:RBN) has returned an average of 5.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Robinson in more detail. View our latest analysis for Robinson
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is it paying an annual yield above 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown 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?
Does Robinson pass our checks?The current trailing twelve-month payout ratio for RBN is 102.04%, meaning the dividend is not sufficiently covered by its earnings. Going forward, analysts expect RBN’s payout to remain around the same level at 95.09% of its earnings, which leads to a dividend yield of 5.95%. 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. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, Robinson has a yield of 5.79%, which is high for Packaging stocks.
If you are building an income portfolio, then Robinson 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, 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. I’ve put together three key factors you should look at:
- 1. Future Outlook: What are well-informed industry analysts predicting for RBN’s future growth? Take a look at our free research report of analyst consensus for RBN’s outlook.
- 2. Valuation: What is RBN 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 RBN is currently mispriced by the market.
- 3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.