6 Days Left To Cash In On Husky Energy Inc (TSE:HSE) Dividend, Should Investors Buy?
On the 02 April 2018, Husky Energy Inc (TSX:HSE) will be paying shareholders an upcoming dividend amount of CA$0.08 per share. However, investors must have bought the company’s stock before 19 March 2018 in order to qualify for the payment. That means you have only 6 days left! 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 Husky Energy’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Husky Energy
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has the amount of dividend per share grown 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 does Husky Energy fare?
The company currently pays out 10.03% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect HSE’s payout to increase to 57.82% of its earnings, which leads to a dividend yield of 1.73%. However, EPS is forecasted to fall to CA$0.74 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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. Not only have dividend payouts from Husky Energy fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. Compared to its peers, Husky Energy has a yield of 1.77%, which is on the low-side for Oil and Gas stocks.
Next Steps:
After digging a little deeper into Husky Energy’s yield, it’s easy to see why you should be cautious investing in the company just 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, 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. There are three relevant aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for HSE’s future growth? Take a look at our free research report of analyst consensus for HSE’s outlook.
Valuation: What is HSE 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 HSE 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 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.
