Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Westwood Holdings Group Inc (NYSE:WHG) has returned to shareholders over the past 10 years, an average dividend yield of 4.00% annually. Does Westwood Holdings Group tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Westwood Holdings Group
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 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?
- Does earnings amply cover its dividend payments?
- Will it be able to continue to payout at the current rate in the future?
How well does Westwood Holdings Group fit our criteria?
The company currently pays out 97.33% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its 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.
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. WHG has increased its DPS from $1.2 to $2.72 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes WHG a true dividend rockstar.
In terms of its peers, Westwood Holdings Group has a yield of 4.62%, which is high for Capital Markets stocks.
Keeping in mind the dividend characteristics above, Westwood Holdings Group is definitely worth considering for investors looking to build a dedicated income portfolio. 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. Below, I’ve compiled three important factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for WHG’s future growth? Take a look at our free research report of analyst consensus for WHG’s outlook.
- Historical Performance: What has WHG’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- 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.