Over the past 10 years Praxair Inc (NYSE:PX) has returned an average of 2.00% per year from dividend payouts. The company currently pays out a dividend yield of 2.06% to shareholders, making it a relatively attractive dividend stock. Should it have a place in your portfolio? Let’s take a look at Praxair in more detail. See our latest analysis for Praxair
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is it paying an annual yield above 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How well does Praxair fit our criteria?
Praxair has a trailing twelve-month payout ratio of 69.25%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 51.82%, leading to a dividend yield of around 2.20%. However, EPS should increase to $6.81, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of PX it has increased its DPS from $1.5 to $3.3 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. In terms of its peers, Praxair generates a yield of 2.06%, which is on the low-side for Chemicals stocks.
Keeping in mind the dividend characteristics above, Praxair is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three essential factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for PX’s future growth? Take a look at our free research report of analyst consensus for PX’s outlook.
- Historical Performance: What has PX’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.