Canadian Tire Corporation Limited (TSE:CTC.A): Dividend Is Coming In 6 Days, Should You Buy?
Attention dividend hunters! Canadian Tire Corporation Limited (TSX:CTC.A) will be distributing its dividend of CA$0.9 per share on the 01 June 2018, and will start trading ex-dividend in 6 days time on the 27 April 2018. Is this future income a persuasive enough catalyst for investors to think about Canadian Tire as an investment today? Below, 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 Canadian Tire
5 questions to ask before buying 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 consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share risen in the past couple of years?
Is it able to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Canadian Tire fit our criteria?
The current trailing twelve-month payout ratio for the stock is 26.63%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 28.51%, leading to a dividend yield of around 2.30%. Furthermore, EPS should increase to CA$11.81. 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. CTC.A has increased its DPS from CA$0.84 to CA$3.6 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 CTC.A a true dividend rockstar. In terms of its peers, Canadian Tire generates a yield of 2.15%, which is on the low-side for Multiline Retail stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Canadian Tire as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 relevant factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for CTC.A’s future growth? Take a look at our free research report of analyst consensus for CTC.A’s outlook.
Valuation: What is CTC.A 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 CTC.A 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.
