On the 30 January 2018, UP Global Sourcing Holdings plc (LSE:UPGS) will be paying shareholders an upcoming dividend amount of £0.03 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 5 days left! Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at UP Global Sourcing Holdings’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for UP Global Sourcing Holdings
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is it paying an annual yield above 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 it increased its dividend per share amount over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will the company be able to keep paying dividend based on the future earnings growth?
How does UP Global Sourcing Holdings fare?
The company currently pays out 70.88% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 57.30%, leading to a dividend yield of around 6.38%. However, EPS should increase to £0.07, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider UP Global Sourcing Holdings as a dividend investment. It has only been paying out dividend for the past one year. Generally, the rule of thumb for determining whether a stock is a reliable dividend payer is that it should be consistently paying dividends for the past 10 years or more. Clearly there’s a long road ahead before we can ascertain whether UPGS one as a stable dividend player. Compared to its peers, UP Global Sourcing Holdings produces a yield of 6.39%, which is high for retail distributors stocks.
What this means for you:
Are you a shareholder? Investors of UP Global Sourcing Holdings can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, UP Global Sourcing Holdings is one worth keeping around in your income portfolio. However, depending on your current portfolio, it may be valuable exploring other income stocks to increase diversification, or even look at high-growth stocks to complement your steady income stocks. I suggest continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.