Important news for shareholders and potential investors in MGE Energy Inc (NASDAQ:MGEE): The dividend payment of $0.32 per share will be distributed into shareholder on 15 March 2018, and the stock will begin trading ex-dividend at an earlier date, 28 February 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding MGE Energy can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for MGE Energy
5 questions to ask before buying 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-paying companies?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
How well does MGE Energy fit our criteria?MGE Energy has a trailing twelve-month payout ratio of 56.79%, 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 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. MGEE has increased its DPS from $0.95 to $1.29 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. This is an impressive feat, which makes MGEE a true dividend rockstar. Compared to its peers, MGE Energy has a yield of 2.37%, which is on the low-side for Electric Utilities stocks.
With these dividend metrics in mind, I definitely rank MGE Energy 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 aspects you should further research:
- 1. Valuation: What is MGEE 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 MGEE is currently mispriced by the market.
- 2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MGE Energy’s board and the CEO’s back ground.
- 3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.