Is Buying The Goodyear Tire & Rubber Company (NASDAQ:GT) For Its Upcoming $0.14 Dividend A Good Choice?
On the 01 June 2018, The Goodyear Tire & Rubber Company (NASDAQ:GT) will be paying shareholders an upcoming dividend amount of $0.14 per share. However, investors must have bought the company’s stock before 30 April 2018 in order to qualify for the payment. That means you have only 4 days left! Should you diversify into Goodyear Tire & Rubber and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View our latest analysis for Goodyear Tire & Rubber
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is its annual yield among the top 25% of dividend-paying companies?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
Does Goodyear Tire & Rubber pass our checks?
The company currently pays out 31.67% 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 lower payout ratio of 12.68%, leading to a dividend yield of 2.18%. However, EPS should increase to $3.02, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Goodyear Tire & Rubber as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Goodyear Tire & Rubber has a yield of 2.08%, which is on the low-side for Auto Components stocks.
Next Steps:
If Goodyear Tire & Rubber is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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 factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for GT’s future growth? Take a look at our free research report of analyst consensus for GT’s outlook.
Valuation: What is GT 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 GT is currently mispriced by the market.
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.
