Have you been keeping an eye on MDU Resources Group Inc’s (NYSE:MDU) upcoming dividend of $0.2 per share payable on the 01 July 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 13 June 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at MDU Resources Group’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for MDU Resources Group
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does MDU Resources Group fare?
The current trailing twelve-month payout ratio for the stock is 52.40%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect MDU’s payout to remain around the same level at 52.69% of its earnings, which leads to a dividend yield of around 2.97%. In addition to this, EPS is forecasted to fall to $1.47 in the upcoming year. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. MDU has increased its DPS from $0.58 to $0.79 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Relative to peers, MDU Resources Group has a yield of 2.89%, which is on the low-side for Integrated Utilities stocks.
Taking into account the dividend metrics, MDU Resources Group ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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 fundamental aspects you should further examine:
- Valuation: What is MDU 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 MDU is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MDU Resources Group’s board and the CEO’s back ground.
- 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 pass 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.