Have you been waiting for General Cable Corporation’s (NYSE:BGC) upcoming dividend of $0.18 per share? Then you only have to wait 3 more days before the stock pays out on 29 December 2017, and starts trading ex-dividend on the 07 December 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine BGC’s latest financial data to analyse its dividend characteristics. See our latest analysis for BGC
5 questions to ask before buying a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is their annual yield among the top 25% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has dividend per share risen in the past couple of years?
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Can it afford to pay the current rate of dividends from its earnings?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does General Cable fit our criteria?
General Cable has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider General Cable as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, BGC has a yield of 3.30%, which is high for electrical equipment stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in BGC right now, in terms of its dividend attributes. It may be valuable exploring other dividend stocks as alternatives to BGC or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Now you know to keep in mind the reason why investors should be careful investing in BGC for the dividend. But if you are not exclusively a dividend investor, BGC could still be an interesting investment opportunity. As with all investments, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Check our latest free fundmental analysis to explore other aspects of BGC.
To help readers see pass 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.