If you are interested in cashing in on Nutrisystem Inc’s (NASDAQ:NTRI) upcoming dividend of US$0.25 per share, you only have 2 days left to buy the shares before its ex-dividend date, 08 August 2018, in time for dividends payable on the 20 August 2018. Is this future income a persuasive enough catalyst for investors to think about Nutrisystem as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share amount increased over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
How does Nutrisystem fare?
Nutrisystem has a trailing twelve-month payout ratio of 46.34%, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. NTRI has increased its DPS from $0.70 to $1 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.
In terms of its peers, Nutrisystem has a yield of 2.30%, which is high for Online Retail stocks but still below the market’s top dividend payers.
With this in mind, I definitely rank Nutrisystem as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their 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. There are three fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for NTRI’s future growth? Take a look at our free research report of analyst consensus for NTRI’s outlook.
- Valuation: What is NTRI 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 NTRI 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.