3 Days Left Before RGC Resources Inc (NASDAQ:RGCO) Will Start Trading Ex-Dividend, Is It Worth Buying?
On the 01 February 2018, RGC Resources Inc (NASDAQ:RGCO) will be paying shareholders an upcoming dividend amount of $0.16 per share. However, investors must have bought the company’s stock before 12 January 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 RGC Resources’s latest financial data to analyse its dividend characteristics. See our latest analysis for RGC Resources
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is its annual yield among the top 25% of dividend-paying companies?
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?
Is its earnings sufficient to payout dividend at the current rate?
Will it be able to continue to payout at the current rate in the future?
How well does RGC Resources fit our criteria?
The company currently pays out 67.17% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of RGCO it has increased its DPS from $0.42 to $0.58 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, RGC Resources produces a yield of 2.17%, which is on the low-side for gas utilities stocks.
What this means for you:
Are you a shareholder? If RGC Resources is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be beneficial exploring other income stocks as alternatives to RGC Resources or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking all the above into account, RGC Resources is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. As with all investments, 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. Take a look at our latest free fundmental analysis to explore other aspects of RGC Resources.
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.
