Is ACC Limited (NSE:ACC) A Great Dividend Stock?
Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. In the past 10 years ACC Limited (NSEI:ACC) has returned an average of 2.00% per year to investors in the form of dividend payouts. Let’s dig deeper into whether ACC should have a place in your portfolio. Check out our latest analysis for ACC
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it paying an annual yield above 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share risen in the past couple of years?
Is it 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 ACC fare?
The company currently pays out 52.81% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 73.83%, leading to a dividend yield of 2.55%. Furthermore, EPS should increase to ₹61.18. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. 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. Although ACC’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. Compared to its peers, ACC generates a yield of 1.68%, which is high for Basic Materials stocks but still below the market’s top dividend payers.
Next Steps:
With these dividend metrics in mind, I definitely rank ACC as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three key aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for ACC’s future growth? Take a look at our free research report of analyst consensus for ACC’s outlook.
Valuation: What is ACC 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 ACC 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 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.
