If you are interested in cashing in on Genworth Mortgage Insurance Australia Limited’s (ASX:GMA) upcoming dividend of AU$0.12 per share, you only have 2 days left to buy the shares before its ex-dividend date, 15 August 2018, in time for dividends payable on the 30 August 2018. Should you diversify into Genworth Mortgage Insurance Australia and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
View our latest analysis for Genworth Mortgage Insurance Australia
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
-
Is its annual yield among the top 25% of dividend-paying companies?
-
Has it paid dividend every year without dramatically reducing payout in the past?
-
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 well does Genworth Mortgage Insurance Australia fit our criteria?
The company currently pays out 94.25% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. Going forward, analysts expect GMA’s payout to remain around the same level at 94.37% of its earnings, which leads to a dividend yield of 8.37%. Moreover, EPS should increase to A$0.22.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Genworth Mortgage Insurance Australia as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, Genworth Mortgage Insurance Australia produces a yield of 7.12%, which is high for Mortgage stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Genworth Mortgage Insurance Australia for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. Below, I’ve compiled three fundamental aspects you should look at: