Shares of Acme United Corporation (AMEX:ACU) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.11 per share, investors must have owned the shares prior to 29 March 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Acme United 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. View our latest analysis for Acme United
5 checks you should do on 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 it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How well does Acme United fit our criteria?
Acme United has a trailing twelve-month payout ratio of 35.61%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect ACU’s payout to fall to 24.58% of its earnings, which leads to a dividend yield of 2.18%. However, EPS should increase to $1.65, 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 ACU it has increased its DPS from $0.16 to $0.44 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Relative to peers, Acme United has a yield of 2.18%, which is on the low-side for Commercial Services stocks.
Considering the dividend attributes we analyzed above, Acme United 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 recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three important aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for ACU’s future growth? Take a look at our free research report of analyst consensus for ACU’s outlook.
- Valuation: What is ACU 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 ACU 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.