Is DNB ASA (OB:DNB) A Great Dividend Stock?
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. In the past 10 years DNB ASA (OB:DNB) has returned an average of 3.00% per year to investors in the form of dividend payouts. Let’s dig deeper into whether DNB should have a place in your portfolio. Check out our latest analysis for DNB
5 checks you should do on a dividend stock
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 its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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 does DNB fare?
The current trailing twelve-month payout ratio for the stock is 52.40%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 56.36%, leading to a dividend yield of around 5.55%. Moreover, EPS should increase to NOK14.28.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Compared to its peers, DNB generates a yield of 4.48%, which is on the low-side for Banks stocks.
Next Steps:
Keeping in mind the dividend characteristics above, DNB is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three relevant factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for DNB’s future growth? Take a look at our free research report of analyst consensus for DNB’s outlook.
Valuation: What is DNB 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 DNB 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.
