If you are interested in cashing in on Eaton Vance Corp’s (NYSE:EV) upcoming dividend of $0.31 per share, you only have 3 days left to buy the shares before its ex-dividend date, 27 April 2018, in time for dividends payable on the 15 May 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 Eaton Vance’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Eaton Vance
5 questions I ask before picking a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is its annual yield among the top 25% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased 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?
Does Eaton Vance pass our checks?
The company currently pays out 44.20% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect EV’s payout to fall to 37.01% of its earnings, which leads to a dividend yield of around 2.53%. However, EPS should increase to $3.33, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of EV it has increased its DPS from $0.6 to $1.24 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, Eaton Vance produces a yield of 2.25%, which is on the low-side for Capital Markets stocks.
With this in mind, I definitely rank Eaton Vance as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their 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. Below, I’ve compiled three important aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for EV’s future growth? Take a look at our free research report of analyst consensus for EV’s outlook.
- Valuation: What is EV 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 EV 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.