Investors who want to cash in on Autoliv Inc’s (NYSE:ALV) upcoming dividend of US$0.62 per share have only 2 days left to buy the shares before its ex-dividend date, 21 August 2018, in time for dividends payable on the 06 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Autoliv’s latest financial data to analyse its dividend characteristics.
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it paying an annual yield above 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 is able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
Does Autoliv pass our checks?
The company currently pays out 42.54% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect ALV’s payout to fall to 30.55% of its earnings, which leads to a dividend yield of 3.01%. However, EPS should increase to $7.97, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Relative to peers, Autoliv has a yield of 2.68%, which is high for Auto Components stocks but still below the market’s top dividend payers.
With this in mind, I definitely rank Autoliv 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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three key factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for ALV’s future growth? Take a look at our free research report of analyst consensus for ALV’s outlook.
- Valuation: What is ALV 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 ALV 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 past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.