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Investors who want to cash in on Park Group plc’s (LON:PKG) upcoming dividend of UK£0.021 per share have only 2 days left to buy the shares before its ex-dividend date, 23 August 2018, in time for dividends payable on the 01 October 2018. Is this future income a persuasive enough catalyst for investors to think about Park Group as an investment today? Below, 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 Park Group

5 questions to ask before buying a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• Is its annual yield among the top 25% of dividend-paying companies?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has dividend per share amount increased over the past?

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

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

Does Park Group pass our checks?

The current trailing twelve-month payout ratio for the stock is 54.29%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect PKG’s payout to remain around the same level at 53.55% of its earnings, which leads to a dividend yield of 4.78%. Furthermore, EPS should increase to £0.059.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. PKG has increased its DPS from £0.012 to £0.030 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.

Relative to peers, Park Group generates a yield of 4.42%, which is on the low-side for Consumer Finance stocks.

Next Steps:

With this in mind, I definitely rank Park Group as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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 key aspects you should further research:

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

2. Valuation: What is PKG 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 PKG 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.