Shares of Paddy Power Betfair plc (ISE:PPB) will begin trading ex-dividend in 2 days. To qualify for the dividend check of UK£0.67 per share, investors must have owned the shares prior to 23 August 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Paddy Power Betfair 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 Paddy Power Betfair
5 checks you should use to assess 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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Does it consistently pay out dividends without missing a payment of significantly 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 the company be able to keep paying dividend based on the future earnings growth?
How does Paddy Power Betfair fare?
The company currently pays out 78.18% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. However, going forward, analysts expect PPB’s payout to fall to 50.58% of its earnings, which leads to a dividend yield of 3.05%. However, EPS should increase to £3.25, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
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. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Paddy Power Betfair generates a yield of 2.87%, which is high for Hospitality stocks.
Next Steps:
Considering the dividend attributes we analyzed above, Paddy Power Betfair is definitely worth keeping an eye on for someone looking to build a dedicated income 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 relevant factors you should look at:
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Future Outlook: What are well-informed industry analysts predicting for PPB’s future growth? Take a look at our free research report of analyst consensus for PPB’s outlook.
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Valuation: What is PPB 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 PPB 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.