8 Days Left To McCarthy & Stone plc (LON:MCS)’s Ex-Dividend Date, Should Investors Buy?
Shares of McCarthy & Stone plc (LSE:MCS) will begin trading ex-dividend in 8 days. To qualify for the dividend check of £0.02 per share, investors must have owned the shares prior to 03 May 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. What does this mean for current shareholders and potential investors? Below, I will explain how holding McCarthy & Stone can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for McCarthy & Stone
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
How well does McCarthy & Stone fit our criteria?
McCarthy & Stone has a trailing twelve-month payout ratio of 45.82%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 36.41%, leading to a dividend yield of 4.41%. However, EPS should increase to £0.16, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. Unfortunately, it is really too early to view McCarthy & Stone as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, McCarthy & Stone generates a yield of 3.95%, which is on the low-side for Consumer Durables stocks.
Next Steps:
Whilst there are few things you may like about McCarthy & Stone from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. I’ve put together three key aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for MCS’s future growth? Take a look at our free research report of analyst consensus for MCS’s outlook.
Valuation: What is MCS 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 MCS 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.
