4 Days Left To Cash In On TOTAL S.A. (EPA:FP) Dividend
Attention dividend hunters! TOTAL S.A. (EPA:FP) will be distributing its dividend of US$0.64 per share on the 10 January 2019, and will start trading ex-dividend in 4 days time on the 18 December 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into TOTAL’s latest financial data to analyse its dividend attributes.
Check out our latest analysis for TOTAL
How I analyze 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?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has it increased its dividend per share amount over the past?
Is is able to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does TOTAL fit our criteria?
TOTAL has a trailing twelve-month payout ratio of 68%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 51% which, assuming the share price stays the same, leads to a dividend yield of around 5.5%. However, EPS should increase to $5.69, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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. Although FP’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Relative to peers, TOTAL generates a yield of 5.2%, which is high for Oil and Gas stocks.
Next Steps:
Keeping in mind the dividend characteristics above, TOTAL is definitely worth considering for investors looking to build a dedicated income portfolio. 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 key aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for FP’s future growth? Take a look at our free research report of analyst consensus for FP’s outlook.
Valuation: What is FP 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 FP is currently mispriced by the market.
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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
