On the 29 December 2017, Garmin Ltd (NASDAQ:GRMN) will be paying shareholders an upcoming dividend amount of $0.51 per share. However, investors must have bought the company’s stock before 13 December 2017 in order to qualify for the payment. That means you have only 3 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding GRMN can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Garmin
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
-
Is it paying an annual yield above 75% of dividend payers?
-
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
-
Has the amount of dividend per share grown 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 does Garmin fare?
The current payout ratio for the stock is 55.35%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 70.45%, leading to a dividend yield of around 3.33%. However, EPS is forecasted to fall to $3.12 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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, GRMN has a yield of 3.28%, which is high for household durables stocks.
What this means for you:
Are you a shareholder? Investors of Garmin can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, GRMN is one worth keeping around in your income portfolio. However, depending on your current holdings, 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 encourage you to continue 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.
Are you a potential investor? With these dividend metrics in mind, I definitely rank Garmin as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. Another aspect to consider for GRMN is how much it’s actually worth. Is Garmin overvalued or is it actually a bargain? Check our latest free analysis to find out!
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.