Monsanto Company (NYSE:MON): Ex-Dividend Is In 3 Days, Should You Buy?

Important news for shareholders and potential investors in Monsanto Company (NYSE:MON): The dividend payment of $0.54 per share will be distributed into shareholder on 27 April 2018, and the stock will begin trading ex-dividend at an earlier date, 05 April 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Monsanto’s latest financial data to analyse its dividend characteristics. See our latest analysis for Monsanto

5 questions I ask before picking 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 payers?
  • Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
  • Has it increased its dividend per share amount over the past?
  • Is its earnings sufficient to payout dividend at the current rate?
  • Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

NYSE:MON Historical Dividend Yield Apr 1st 18
NYSE:MON Historical Dividend Yield Apr 1st 18

Does Monsanto pass our checks?

The current trailing twelve-month payout ratio for the stock is 39.61%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 37.60%, leading to a dividend yield of around 2.01%. Furthermore, EPS should increase to $5.58. 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 MON it has increased its DPS from $0.7 to $2.16 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Relative to peers, Monsanto generates a yield of 1.85%, which is on the low-side for Chemicals stocks.

Next Steps:

Considering the dividend attributes we analyzed above, Monsanto is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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. Below, I’ve compiled three pertinent aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for MON’s future growth? Take a look at our free research report of analyst consensus for MON’s outlook.
  2. Valuation: What is MON 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 MON is currently mispriced by the market.
  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.