If you are interested in cashing in on Dairy Crest Group plc’s (LSE:DCG) upcoming dividend of £0.06 per share, you only have 3 days left to buy the shares before its ex-dividend date, 04 January 2018, in time for dividends payable on the 25 January 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Dairy Crest Group’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for Dairy Crest Group
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Is it the top 25% annual dividend yield payer?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has the amount of dividend per share grown over the past?
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Can it afford to pay the current rate of dividends from its earnings?
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Will it have the ability to keep paying its dividends going forward?
Does Dairy Crest Group pass our checks?
The company currently pays out 22.15% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect DCG’s payout to increase to 61.12% of its earnings, which leads to a dividend yield of around 4.20%. However, EPS is forecasted to fall to £0.38 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality facing DCG investors is that whilst it has continued to pay shareholders dividend, there has not been any increase in the level of dividends paid in the past decade. However, income investors that value stability over growth may still find DCG appealing. Relative to peers, Dairy Crest Group has a yield of 3.90%, which is high for food products stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? With Dairy Crest Group producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. But, depending on your current portfolio, it may be worth exploring other income stocks to increase diversification, or even look at high-growth stocks to supplement your steady income stocks. I recommend continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.