Investors who want to cash in on Cervus Equipment Corporation’s (TSX:CERV) upcoming dividend of CA$0.07 per share have only 3 days left to buy the shares before its ex-dividend date, 28 December 2017, in time for dividends payable on the 15 January 2018. Should you diversify into Cervus Equipment 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. See our latest analysis for Cervus Equipment
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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Is their annual yield among the top 25% 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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Does earnings amply cover its dividend payments?
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Will it be able to continue to payout at the current rate in the future?
How well does Cervus Equipment fit our criteria?
The current payout ratio for the stock is 17.71%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 17.76%, leading to a dividend yield of 1.80%. Moreover, EPS is forecasted to fall to CA$1.35 in the upcoming year. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Cervus Equipment fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, Cervus Equipment has a yield of 1.80%, which is on the low-side for trade distributors stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in Cervus Equipment right now, in terms of its dividend attributes. It may be valuable exploring other dividend stocks as alternatives to Cervus Equipment or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? After digging a little deeper into Cervus Equipment’s yield, it’s easy to see why you should be cautious investing in the company just 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. As with all investments, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Dig deeper in our latest free fundmental analysis to explore other aspects of Cervus Equipment.
To help readers see pass 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.