Only 3 Days Left To Connect Group PLC (LON:CNCT)’s Ex-Dividend Date, Should You Buy?

Attention dividend hunters! Connect Group PLC (LSE:CNCT) will be distributing its dividend of £0.07 per share on the 09 February 2018, and will start trading ex-dividend in 3 days time on the 11 January 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Connect Group's latest financial data to analyse its dividend characteristics. Check out our latest analysis for Connect Group

What Is A Dividend Rock Star?

It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically:

Its annual yield is among the top 25% of dividend payers

It has paid dividend every year without dramatically reducing payout in the past

Its has increased its dividend per share amount over the past

It can afford to pay the current rate of dividends from its earnings

It has the ability to keep paying its dividends going forward

High Yield And Dependable

Connect Group currently yields 8.67%, which is high for retail distributors stocks. But the real reason Connect Group stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.

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. In the case of CNCT it has increased its DPS from £0.06 to £0.1 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. This is an impressive feat, which makes CNCT a true dividend rockstar. The current payout ratio for the stock is 89.07%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect CNCT's payout to fall to 61.47% of its earnings, which leads to a dividend yield of 8.99%. However, EPS should increase to £0.15, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

What this means for you:

Are you a shareholder? With Connect Group producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a top dividend generator moving forward. But, depending on your current portfolio, it may be valuable exploring other income stocks to enhance your diversification, or even look at high-growth stocks to supplement your steady income stocks. I recommend continuing your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? Connect Group ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. No matter how much of a cash cow the stock is, it is not worth an infinite price. Is Connect Group overvalued or is it actually a bargain? Take a look at our latest free analysis to find out!

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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.