If you are interested in cashing in on Core Laboratories NV’s (NYSE:CLB) upcoming dividend of $0.55 per share, you only have 3 days left to buy the shares before its ex-dividend date, 25 January 2018, in time for dividends payable on the 16 February 2018. Is this future income a persuasive enough catalyst for investors to think about Core Laboratories 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 Core Laboratories
5 questions I ask before picking a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is its annual yield among the top 25% of dividend-paying companies?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has the amount of dividend per share grown over the past?
- Is is able 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?
Does Core Laboratories pass our checks?
The company currently pays out 126.31% of its earnings as a dividend, which means that the dividend is not well-covered by its earnings. However, going forward, analysts expect CLB’s payout to fall into a more sustainable range of 72.25% of its earnings, which leads to a dividend yield of 1.90%. Moreover, EPS should increase to $2.51, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. CLB has increased its DPS from $0.2 to $2.2 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Compared to its peers, Core Laboratories produces a yield of 1.90%, which is on the low-side for energy services stocks.
If Core Laboratories is in your portfolio for cash-generating reasons, there may be better alternatives out there. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 look at:
1. Future Outlook: What are well-informed industry analysts predicting for CLB’s future growth? Take a look at our free research report of analyst consensus for CLB’s outlook.
2. Valuation: What is CLB 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 CLB is currently mispriced by the market.
3. 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.