Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. DHT Holdings Inc (NYSE:DHT) has returned to shareholders over the past 10 years, an average dividend yield of 8.00% annually. Does DHT Holdings tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. Check out our latest analysis for DHT Holdings
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
- Is it paying an annual yield above 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- 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?
Does DHT Holdings pass our checks?The current payout ratio for DHT is negative, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from DHT Holdings have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Compared to its peers, DHT Holdings generates a yield of 3.72%, which is on the low-side for Oil and Gas stocks.
Now you know to keep in mind the reason why investors should be careful investing in DHT Holdings for the dividend. 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, 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 important aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for DHT’s future growth? Take a look at our free research report of analyst consensus for DHT’s outlook.
- Valuation: What is DHT 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 DHT 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.