Yahoo Finance

A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Historically, Groupe Pizzorno Environnement (EPA:GPE) has paid a dividend to shareholders. It currently yields 2.7%. Let’s dig deeper into whether Groupe Pizzorno Environnement should have a place in your portfolio.

See our latest analysis for Groupe Pizzorno Environnement

5 questions to ask before buying a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Does it pay an annual yield higher than 75% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has dividend per share risen in the past couple of years?

• Is is able to pay the current rate of dividends from its earnings?

• Will it be able to continue to payout at the current rate in the future?

Does Groupe Pizzorno Environnement pass our checks?

Groupe Pizzorno Environnement has a trailing twelve-month payout ratio of 25.8%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect GPE’s payout to remain around the same level at 27.8% of its earnings, which leads to a dividend yield of 2.7%. Furthermore, EPS is forecasted to fall to €1.39 in the upcoming year.

When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.

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. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

Relative to peers, Groupe Pizzorno Environnement produces a yield of 2.7%, which is on the low-side for Commercial Services stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Groupe Pizzorno Environnement as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. I’ve put together three relevant factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for GPE’s future growth? Take a look at our free research report of analyst consensus for GPE’s outlook.

2. Valuation: What is GPE worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether GPE is currently mispriced by the market.

3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.