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Investors who want to cash in on James Fisher and Sons plc's (LON:FSJ) upcoming dividend of UK£0.21 per share have only 3 days left to buy the shares before its ex-dividend date, 04 April 2019, in time for dividends payable on the 10 May 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into James Fisher and Sons's latest financial data to analyse its dividend attributes.
View our latest analysis for James Fisher and Sons
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five 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 amount increased over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will it have the ability to keep paying its dividends going forward?
How does James Fisher and Sons fare?
The current trailing twelve-month payout ratio for the stock is 35%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect FSJ's payout to remain around the same level at 38% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 2.0%. Furthermore, EPS should increase to £0.94.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
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. FSJ has increased its DPS from £0.13 to £0.32 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, James Fisher and Sons generates a yield of 1.6%, which is on the low-side for Infrastructure stocks.
Next Steps:
Keeping in mind the dividend characteristics above, James Fisher and Sons is definitely worth considering for investors looking to build a dedicated income portfolio. 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 essential factors you should further examine: