In This Article:
On the 11 February 2019, Masco Corporation (NYSE:MAS) will be paying shareholders an upcoming dividend amount of US$0.12 per share. However, investors must have bought the company’s stock before 10 January 2019 in order to qualify for the payment. That means you have only 4 days left! Should you diversify into Masco 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.
Check out our latest analysis for Masco
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
-
Is it paying an annual yield above 75% of dividend payers?
-
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
-
Has dividend per share amount increased over the past?
-
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?
How does Masco fare?
Masco has a trailing twelve-month payout ratio of 22%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 17% which, assuming the share price stays the same, leads to a dividend yield of 1.6%. However, EPS should increase to $2.62, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. MAS investors will be well aware the dividend payments are lower today than they were 10 years ago, although the payments have at least been steady. However, income investors that value stability over growth may still find MAS appealing.
Compared to its peers, Masco produces a yield of 1.6%, which is on the low-side for Building stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Masco 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, 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. I’ve put together three essential factors you should further research: