Important news for shareholders and potential investors in Wallenius Wilhelmsen ASA (OB:WALWIL): The dividend payment of US$0.06 per share will be distributed to shareholders on 09 May 2019, and the stock will begin trading ex-dividend at an earlier date, 26 April 2019. Should you diversify into Wallenius Wilhelmsen and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% 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?
- Is its earnings sufficient to payout dividend at the current rate?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Wallenius Wilhelmsen fare?
Wallenius Wilhelmsen has a trailing twelve-month payout ratio of 49%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 34% which, assuming the share price stays the same, leads to a dividend yield of 5.7%. However, EPS should increase to $0.42, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Wallenius Wilhelmsen as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Wallenius Wilhelmsen generates a yield of 1.7%, which is on the low-side for Shipping stocks.
Now you know to keep in mind the reason why investors should be careful investing in Wallenius Wilhelmsen 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, 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 fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for WALWIL’s future growth? Take a look at our free research report of analyst consensus for WALWIL’s outlook.
- Valuation: What is WALWIL 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 WALWIL 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.