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?
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.
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:
- 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.
- 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.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.