Have you been keeping an eye on Dunelm Group plc’s (LSE:DNLM) upcoming dividend of £0.07 per share payable on the 13 April 2018? Then you only have 6 days left before the stock starts trading ex-dividend on the 22 March 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Dunelm Group’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Dunelm Group
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically: It is paying an annual yield above 75% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its dividend per share amount has increased over the past It is able to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward
High Yield And Dependable
The company’s dividend yield stands at 4.45%, which is high for Specialty Retail stocks. But the real reason Dunelm Group stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. DNLM has increased its DPS from £0.04 to £0.25 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. This is an impressive feat, which makes DNLM a true dividend rockstar. Dunelm Group has a trailing twelve-month payout ratio of 72.32%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 57.34%, leading to a dividend yield of around 5.14%. However, EPS should increase to £0.48, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
Dunelm Group ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given 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. Below, I’ve compiled three key factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for DNLM’s future growth? Take a look at our free research report of analyst consensus for DNLM’s outlook.
- Valuation: What is DNLM 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 DNLM is currently mispriced by the market.
- Other Dividend Rockstars: Are there strong dividend payers with better 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.