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Investors who want to cash in on Jarvis Securities plc’s (LON:JIM) upcoming dividend of UK£0.06 per share have only 4 days left to buy the shares before its ex-dividend date, 14 February 2019, in time for dividends payable on the 07 March 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Jarvis Securities’s latest financial data to analyse its dividend characteristics.

View our latest analysis for Jarvis Securities

5 checks you should do on a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is their annual yield among the top 25% of dividend payers?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has the amount of dividend per share grown over the past?

• 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?

Does Jarvis Securities pass our checks?

The company currently pays out 80% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

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. Shareholders would have seen a few years of reduced payments in this time.

Relative to peers, Jarvis Securities has a yield of 4.9%, which is high for Capital Markets stocks but still below the market’s top dividend payers.

Next Steps:

Whilst there are few things you may like about Jarvis Securities from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. I’ve put together three fundamental factors you should further examine: