Is Delegat Group Limited (NZE:DGL) A Good Pick For Income Investors?
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Delegat Group Limited (NZSE:DGL) has returned to shareholders over the past 10 years, an average dividend yield of 3.00% annually. Should it have a place in your portfolio? Let’s take a look at Delegat Group in more detail. View our latest analysis for Delegat Group
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 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?
Is it able to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How does Delegat Group fare?
The company currently pays out 32.34% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect DGL’s payout to remain around the same level at 31.31% of its earnings, which leads to a dividend yield of 2.07%. Moreover, EPS should increase to NZ$0.4. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. DGL has increased its DPS from NZ$0.05 to NZ$0.13 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 DGL a true dividend rockstar. In terms of its peers, Delegat Group generates a yield of 1.70%, which is on the low-side for Beverage stocks.
Next Steps:
With this in mind, I definitely rank Delegat Group as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their 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. There are three pertinent aspects you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for DGL’s future growth? Take a look at our free research report of analyst consensus for DGL’s outlook.
2. Valuation: What is DGL 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 DGL is currently mispriced by the market.
3. 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.
