Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Historically, Ciner Resources LP (NYSE:CINR) has been paying a dividend to shareholders. Today it yields 8.3%. Should it have a place in your portfolio? Let’s take a look at Ciner Resources in more detail.
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key 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 its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
How well does Ciner Resources fit our criteria?
Ciner Resources has a trailing twelve-month payout ratio of 92.7%, meaning the dividend is not sufficiently covered by its earnings. However, going forward, analysts expect CINR’s payout to fall into a more sustainable range of 88.2% of its earnings, which leads to a dividend yield of 8.3%.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Ciner Resources 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.
Relative to peers, Ciner Resources has a yield of 8.3%, which is high for Chemicals stocks.
Whilst there are few things you may like about Ciner Resources from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. I’ve put together three pertinent aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CINR’s future growth? Take a look at our free research report of analyst consensus for CINR’s outlook.
- Valuation: What is CINR 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 CINR 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 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.