Attention dividend hunters! Firma Oponiarska Debica Spólka Akcyjna (WSE:DBC) will be distributing its dividend of zł6.50 per share on the 14 December 2018, and will start trading ex-dividend in 4 days time on the 13 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Firma Oponiarska Debica Spólka Akcyjna’s latest financial data to analyse its dividend characteristics.
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has the amount of dividend per share grown over the past?
- Does earnings amply cover its dividend payments?
- Will it be able to continue to payout at the current rate in the future?
Does Firma Oponiarska Debica Spólka Akcyjna pass our checks?
Firma Oponiarska Debica Spólka Akcyjna has a trailing twelve-month payout ratio of 69.0%, 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 you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Firma Oponiarska Debica Spólka Akcyjna generates a yield of 4.9%, which is high for Auto Components stocks but still below the market’s top dividend payers.
Taking all the above into account, Firma Oponiarska Debica Spólka Akcyjna 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. 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 factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for DBC’s future growth? Take a look at our free research report of analyst consensus for DBC’s outlook.
- Valuation: What is DBC 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 DBC 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 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 firstname.lastname@example.org.