Have you been keeping an eye on WEC Energy Group Inc’s (NYSE:WEC) upcoming dividend of US$0.55 per share payable on the 01 September 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 13 August 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into WEC Energy Group’s latest financial data to analyse its dividend attributes.
5 questions I ask before picking 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 it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does WEC Energy Group pass our checks?
WEC Energy Group has a trailing twelve-month payout ratio of 53.33%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 66.66%, leading to a dividend yield of 3.53%. However, EPS is forecasted to fall to $3.41 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of WEC it has increased its DPS from $0.54 to $2.21 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, WEC Energy Group has a yield of 3.30%, which is on the low-side for Integrated Utilities stocks.
Keeping in mind the dividend characteristics above, WEC Energy Group is definitely worth considering for investors 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 fundamental factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for WEC’s future growth? Take a look at our free research report of analyst consensus for WEC’s outlook.
- Historical Performance: What has WEC’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 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.