On the 03 October 2018, Stagecoach Group plc (LON:SGC) will be paying shareholders an upcoming dividend amount of UK£0.039 per share. However, investors must have bought the company’s stock before 23 August 2018 in order to qualify for the payment. That means you have only 2 days left! Should you diversify into Stagecoach Group 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.
View our latest analysis for Stagecoach Group
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is it paying an annual yield above 75% of dividend payers?
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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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Is is able to pay the current rate of dividends from its earnings?
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Will the company be able to keep paying dividend based on the future earnings growth?
Does Stagecoach Group pass our checks?
The current trailing twelve-month payout ratio for the stock is 62.63%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect SGC’s payout to fall to 51.44% of its earnings, which leads to a dividend yield of 4.78%. However, EPS should increase to £0.17, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Although SGC’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.
Relative to peers, Stagecoach Group produces a yield of 4.56%, which is high for Transportation stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Stagecoach Group as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three pertinent factors you should look at:
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Future Outlook: What are well-informed industry analysts predicting for SGC’s future growth? Take a look at our free research report of analyst consensus for SGC’s outlook.
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Valuation: What is SGC 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 SGC 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 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.