Shares of Tapestry Inc (NYSE:TPR) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.34 per share, investors must have owned the shares prior to 07 December 2017, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine TPR’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for Tapestry
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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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 risen in the past couple of years?
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Is is able to pay the current rate of dividends from its earnings?
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Will it be able to continue to payout at the current rate in the future?
How does Tapestry fare?
The company currently pays out 83.36% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect TPR’s payout to fall to 54.82% of its earnings, which leads to a dividend yield of 3.50%. However, EPS should increase to $2.15, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Tapestry as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Tapestry produces a yield of 3.25%, which is high for textiles, apparel and luxury goods stocks.
What this means for you:
Are you a shareholder?
Are you a shareholder? With Tapestry producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. However, depending on your current holdings, it may be beneficial exploring other income stocks to increase diversification, or even look at high-growth stocks to complement your steady income stocks. I suggest continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.