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Important news for shareholders and potential investors in Vinyl Chemicals (India) Limited (NSE:VINYLINDIA): The dividend payment of ₹2.40 per share will be distributed into shareholder on 30 September 2018, and the stock will begin trading ex-dividend at an earlier date, 16 August 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Vinyl Chemicals (India)’s latest financial data to analyse its dividend attributes.
View our latest analysis for Vinyl Chemicals (India)
How I analyze 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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Does it pay an annual yield higher than 75% of dividend payers?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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Has dividend per share amount increased 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 the company be able to keep paying dividend based on the future earnings growth?
Does Vinyl Chemicals (India) pass our checks?
The company currently pays out 37.57% of its earnings as a dividend, according to its trailing twelve-month data, 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 there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Vinyl Chemicals (India) as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Vinyl Chemicals (India) generates a yield of 2.31%, which is high for Trade Distributors stocks.
Next Steps:
If you are building an income portfolio, then Vinyl Chemicals (India) is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three essential factors you should look at: