Have you been keeping an eye on Access National Corporation’s (NASDAQ:ANCX) upcoming dividend of US$0.16 per share payable on the 24 August 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 08 August 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Access National’s most recent financial data to examine its dividend characteristics in more detail.
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share amount increased 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?
Does Access National pass our checks?
The current trailing twelve-month payout ratio for the stock is 45.54%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 32.95%, leading to a dividend yield of around 2.34%. However, EPS should increase to $1.79, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of ANCX it has increased its DPS from $0.040 to $0.64 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. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, Access National produces a yield of 2.31%, which is on the low-side for Banks stocks.
Keeping in mind the dividend characteristics above, Access National is definitely worth considering for investors looking to build a dedicated income portfolio. 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. There are three important aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for ANCX’s future growth? Take a look at our free research report of analyst consensus for ANCX’s outlook.
- Valuation: What is ANCX 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 ANCX 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 firstname.lastname@example.org.