A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Over the past 10 years, Turkcell Iletisim Hizmetleri AS. (NYSE:TKC) has returned an average of 5.00% per year to shareholders in terms of dividend yield. Does Turkcell Iletisim Hizmetleri tick all the boxes of a great dividend stock? Below, I'll take you through my analysis. See our latest analysis for Turkcell Iletisim Hizmetleri
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- 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 the amount of dividend per share grown over the past?
- Does earnings amply cover its dividend payments?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Turkcell Iletisim Hizmetleri fit our criteria?The company currently pays out 147.85% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 62.34%, leading to a dividend yield of 7.24%. In addition to this, EPS should increase to TRY1.37, 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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Compared to its peers, Turkcell Iletisim Hizmetleri produces a yield of 6.26%, which is high for Wireless Telecom stocks.
With these dividend metrics in mind, I definitely rank Turkcell Iletisim Hizmetleri as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. I've put together three important factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for TKC’s future growth? Take a look at our free research report of analyst consensus for TKC’s outlook.
- Valuation: What is TKC 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 TKC 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.
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Simply Wall St has no position in any of the companies mentioned. This article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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