In This Article:
Shares of Carnival plc (LON:CCL) will begin trading ex-dividend in 2 days. To qualify for the dividend check of US$0.50 per share, investors must have owned the shares prior to 23 August 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Carnival’s latest financial data to analyse its dividend attributes.
View our latest analysis for Carnival
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
-
Is their annual yield among the top 25% of dividend payers?
-
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
-
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 the company be able to keep paying dividend based on the future earnings growth?
How well does Carnival fit our criteria?
Carnival has a trailing twelve-month payout ratio of 45.68%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 44.22%, leading to a dividend yield of 3.82%. Moreover, EPS should increase to $4.56.
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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.
In terms of its peers, Carnival produces a yield of 3.03%, which is high for Hospitality stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, Carnival ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, 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. Below, I’ve compiled three important factors you should further examine:
-
Future Outlook: What are well-informed industry analysts predicting for CCL’s future growth? Take a look at our free research report of analyst consensus for CCL’s outlook.
-
Valuation: What is CCL 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 CCL is currently mispriced by the market.
-
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.