Shares of Diebold Nixdorf Incorporated (NYSE:DBD) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.1 per share, investors must have owned the shares prior to 23 February 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Diebold Nixdorf and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View our latest analysis for Diebold Nixdorf
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is their annual yield among the top 25% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Is is able 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?
Does Diebold Nixdorf pass our checks?The current payout ratio for DBD is negative, 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. Not only have dividend payouts from Diebold Nixdorf fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Relative to peers, Diebold Nixdorf has a yield of 2.61%, which is high for Tech stocks but still below the market’s top dividend payers.
After digging a little deeper into Diebold Nixdorf’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three relevant factors you should look at:
- 1. Future Outlook: What are well-informed industry analysts predicting for DBD’s future growth? Take a look at our free research report of analyst consensus for DBD’s outlook.
- 2. Valuation: What is DBD 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 DBD is currently mispriced by the market.
- 3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.