Attention dividend hunters! SJR in Scandinavia AB (publ) (STO:SJR B) will be distributing its dividend of kr3.00 per share on the 09 May 2019, and will start trading ex-dividend in 3 days time on the 03 May 2019. Is this future income a persuasive enough catalyst for investors to think about SJR in Scandinavia as an investment today? Below, I'm going to look at the latest data and analyze the stock and its dividend property in further detail.
See our latest analysis for SJR in Scandinavia
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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Does it pay an annual yield higher than 75% of dividend payers?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has the amount of dividend per share grown over the past?
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Does earnings amply cover its dividend payments?
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Will it be able to continue to payout at the current rate in the future?
Does SJR in Scandinavia pass our checks?
SJR in Scandinavia has a trailing twelve-month payout ratio of 109%, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a lower payout ratio of 97% which, assuming the share price stays the same, leads to a dividend yield of 7.5%. However, EPS should increase to SEK3.37, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider 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. Unfortunately, it is really too early to view SJR in Scandinavia 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, SJR in Scandinavia generates a yield of 5.8%, which is high for Professional Services stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in SJR in Scandinavia for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. There are three key aspects you should further examine: