AUB Group Limited (ASX:AUB) Is An Attractive Dividend Stock, Here’s Why
AUB Group Limited (ASX:AUB) has pleased shareholders over the past 10 years, paying out an average dividend of 4.00% annually. The company is currently worth AU$884.91M, and now yields roughly 3.10%. Let’s dig deeper into whether AUB Group should have a place in your portfolio. View our latest analysis for AUB Group
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Does it pay an annual yield higher than 75% of dividend payers?
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?
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 AUB Group fare?
The company currently pays out 61.88% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 64.54%, leading to a dividend yield of around 3.44%. Furthermore, EPS should increase to A$0.72. 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. AUB has increased its DPS from A$0.16 to A$0.43 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, AUB Group produces a yield of 3.10%, which is on the low-side for Insurance stocks.
Next Steps:
With this in mind, I definitely rank AUB Group as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their 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. There are three essential factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for AUB’s future growth? Take a look at our free research report of analyst consensus for AUB’s outlook.
Valuation: What is AUB 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 AUB 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.
