Important news for shareholders and potential investors in Ruth’s Hospitality Group Inc (NASDAQ:RUTH): The dividend payment of $0.11 per share will be distributed into shareholder on 07 June 2018, and the stock will begin trading ex-dividend at an earlier date, 23 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Ruth’s Hospitality Group’s latest financial data to analyse its dividend attributes. See our latest analysis for Ruth’s Hospitality Group
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it paying an annual yield above 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown over the past?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does Ruth’s Hospitality Group fare?The current trailing twelve-month payout ratio for the stock is 34.91%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 31.53%, leading to a dividend yield of around 1.68%. Moreover, EPS should increase to $1.36. 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. Unfortunately, it is really too early to view Ruth’s Hospitality Group as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Ruth’s Hospitality Group generates a yield of 1.66%, which is on the low-side for Hospitality stocks.
Whilst there are few things you may like about Ruth’s Hospitality Group from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 look at:
- Future Outlook: What are well-informed industry analysts predicting for RUTH’s future growth? Take a look at our free research report of analyst consensus for RUTH’s outlook.
- Valuation: What is RUTH 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 RUTH 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.