Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Over the past 10 years, DHT Holdings Inc (NYSE:DHT) has returned an average of 8.00% per year to shareholders in terms of dividend yield. Should it have a place in your portfolio? Let’s take a look at DHT Holdings in more detail. See our latest analysis for DHT Holdings
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share amount increased over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does DHT Holdings fit our criteria?
DHT Holdings has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings.
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. 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.
Relative to peers, DHT Holdings has a yield of 3.08%, which is on the low-side for Oil and Gas stocks.Next Steps:
After digging a little deeper into DHT Holdings’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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 essential factors 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.