Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Historically, Orbis Spólka Akcyjna (WSE:ORB) has been paying a dividend to shareholders. Today it yields 2.3%. Should it have a place in your portfolio? Let’s take a look at Orbis Spólka Akcyjna in more detail.
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is their annual yield among the top 25% 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?
- 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?
How does Orbis Spólka Akcyjna fare?
The company currently pays out 20% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect ORB’s payout to increase to 37% of its earnings, which leads to a dividend yield of 3.0%. However, EPS is forecasted to fall to PLN6.86 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. ORB has increased its DPS from PLN0.40 to PLN1.6 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 ORB a true dividend rockstar.
In terms of its peers, Orbis Spólka Akcyjna generates a yield of 2.3%, which is on the low-side for Hospitality stocks.
Considering the dividend attributes we analyzed above, Orbis Spólka Akcyjna is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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. I’ve put together three fundamental factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for ORB’s future growth? Take a look at our free research report of analyst consensus for ORB’s outlook.
- Valuation: What is ORB 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 ORB 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 email@example.com.