A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Money3 Corporation Limited (ASX:MNY) has returned to shareholders over the past 10 years, an average dividend yield of 7.00% annually. Does Money3 tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Money3
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:
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Is it the top 25% annual dividend yield payer?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has dividend per share amount increased over the past?
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Does earnings amply cover its dividend payments?
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Will it have the ability to keep paying its dividends going forward?
Does Money3 pass our checks?
The current trailing twelve-month payout ratio for the stock is 38.92%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 42.72%, leading to a dividend yield of around 4.92%. Moreover, EPS is forecasted to fall to A$0.19 in the upcoming year. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Although MNY’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. Compared to its peers, Money3 produces a yield of 5.00%, which is high for Consumer Finance stocks but still below the market’s top dividend payers.
Next Steps:
Considering the dividend attributes we analyzed above, Money3 is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three pertinent factors you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for MNY’s future growth? Take a look at our free research report of analyst consensus for MNY’s outlook.
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Valuation: What is MNY 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 MNY is currently mispriced by the market.
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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 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.