Shares of Wheaton Precious Metals Corp (TSX:WPM) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.09 per share, investors must have owned the shares prior to 05 April 2018, 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 Wheaton Precious Metals’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for Wheaton Precious Metals
5 checks you should do on 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 dividend per share amount increased over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
Does Wheaton Precious Metals pass our checks?
Wheaton Precious Metals has a trailing twelve-month payout ratio of more than 200% of earnings, which suggests that the dividend is not well-covered by earnings by any means. However, going forward, analysts expect WPM’s payout to fall into a more sustainable range of 52.68% of its earnings, which leads to a dividend yield of around 1.87%. Furthermore, EPS should increase to $0.62, 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. Unfortunately, it is really too early to view Wheaton Precious Metals as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Wheaton Precious Metals has a yield of 1.76%, which is high for Metals and Mining stocks but still below the low risk savings rate.
After digging a little deeper into Wheaton Precious Metals’s yield, it’s easy to see why you should be cautious investing in the company just 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. I’ve put together three important aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for WPM’s future growth? Take a look at our free research report of analyst consensus for WPM’s outlook.
- Valuation: What is WPM 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 WPM is currently mispriced by the market.
- 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.