On the 02 February 2018, Experian plc (LSE:EXPN) will be paying shareholders an upcoming dividend amount of $0.14 per share. However, investors must have bought the company’s stock before 04 January 2018 in order to qualify for the payment. That means you have only 9 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding Experian can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Experian
5 questions to ask before buying 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 paying an annual yield above 75% of dividend payers?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has dividend per share amount increased over the past?
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Is it able to pay the current rate of dividends from its earnings?
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Will it be able to continue to payout at the current rate in the future?
Does Experian pass our checks?
The company currently pays out 50.31% of its earnings as a dividend, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 44.20%, leading to a dividend yield of 2.14%. However, EPS should increase to $0.93, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. In the case of EXPN it has increased its DPS from $0.13 to $0.42 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes EXPN a true dividend rockstar. Relative to peers, Experian has a yield of 2.63%, which is high for professional services stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? Investors of Experian can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, Experian is one worth keeping around in your income portfolio. But, depending on your current portfolio, it may be beneficial exploring other dividend stocks to improve your diversification, or even look at high-growth stocks to complement your steady income stocks. I recommend continuing your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.