American Software Inc (NASDAQ:AMSW.A): What You Have To Know Before Buying For The Upcoming Dividend
Investors who want to cash in on American Software Inc’s (NASDAQ:AMSW.A) upcoming dividend of $0.11 per share have only 3 days left to buy the shares before its ex-dividend date, 10 May 2018, in time for dividends payable on the 25 May 2018. Is this future income a persuasive enough catalyst for investors to think about American Software as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for American Software
5 questions to ask before buying a dividend stock
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 it increased its dividend per share amount over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it be able to continue to payout at the current rate in the future?
Does American Software pass our checks?
American Software has a trailing twelve-month payout ratio of 62.33%, which means that the dividend is 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 there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. AMSW.A has increased its DPS from $0.36 to $0.44 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. These are all positive signs of a great, reliable dividend stock. Relative to peers, American Software has a yield of 3.33%, which is high for Software stocks but still below the market’s top dividend payers.
Next Steps:
Considering the dividend attributes we analyzed above, American Software is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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. Below, I’ve compiled three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for AMSW.A’s future growth? Take a look at our free research report of analyst consensus for AMSW.A’s outlook.
Valuation: What is AMSW.A 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 AMSW.A 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.
