3 Days Left Before Nexstar Media Group Inc (NASDAQ:NXST) Will Start Trading Ex-Dividend, Is It Worth Buying?
On the 02 March 2018, Nexstar Media Group Inc (NASDAQ:NXST) will be paying shareholders an upcoming dividend amount of $0.38 per share. However, investors must have bought the company’s stock before 15 February 2018 in order to qualify for the payment. That means you have only 3 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Nexstar Media Group’s latest financial data to analyse its dividend characteristics. View our latest analysis for Nexstar Media Group
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it paying an annual yield above 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has the amount of dividend per share grown over the past?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Nexstar Media Group fare?
The company currently pays out 40.92% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. However, going forward, analysts expect NXST’s payout to fall to 14.84% of its earnings, which leads to a dividend yield of around 1.82%. However, EPS should increase to $6.43, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Nexstar Media Group as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Nexstar Media Group produces a yield of 2.11%, which is high for Media stocks but still below the low risk savings rate.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Nexstar Media Group 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. Below, I’ve compiled three pertinent aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for NXST’s future growth? Take a look at our free research report of analyst consensus for NXST’s outlook.
2. Valuation: What is NXST 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 NXST 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.