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If you are interested in cashing in on Christie Group plc’s (LON:CTG) upcoming dividend of UK£0.013 per share, you only have 4 days left to buy the shares before its ex-dividend date, 27 September 2018, in time for dividends payable on the 19 October 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Christie Group’s latest financial data to analyse its dividend attributes.

See our latest analysis for Christie Group

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?

• 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?

Does Christie Group pass our checks?

The current trailing twelve-month payout ratio for the stock is 22.9%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect CTG’s payout to increase to 25.7% of its earnings, which leads to a dividend yield of 2.6%. However, EPS is forecasted to fall to £0.12 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.

When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from Christie Group have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends.

Compared to its peers, Christie Group generates a yield of 2.2%, which is on the low-side for Professional Services stocks.

Next Steps:

Taking all the above into account, Christie Group is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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. There are three key factors you should further examine: