Motor Oil (Hellas) Corinth Refineries S.A. (ATH:MOH) has pleased shareholders over the past 10 years, by paying out dividends. The stock currently pays out a dividend yield of 6.1%, and has a market cap of €2.4b. Let’s dig deeper into whether Motor Oil (Hellas) Corinth Refineries should have a place in your portfolio.
Check out our latest analysis for Motor Oil (Hellas) Corinth Refineries
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Will it be able to continue to payout at the current rate in the future?
How well does Motor Oil (Hellas) Corinth Refineries fit our criteria?
Motor Oil (Hellas) Corinth Refineries has a trailing twelve-month payout ratio of 32%, which means that the dividend is covered by earnings. Going forward, analysts expect MOH’s payout to increase to 50% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 7.1%. However, EPS is forecasted to fall to €2.64 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
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. Although MOH’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time.
Compared to its peers, Motor Oil (Hellas) Corinth Refineries generates a yield of 6.1%, which is high for Oil and Gas stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Motor Oil (Hellas) Corinth Refineries is definitely worth considering for investors looking to build a dedicated income portfolio. 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 essential factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for MOH’s future growth? Take a look at our free research report of analyst consensus for MOH’s outlook.
- Valuation: What is MOH 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 MOH is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.