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How Does ASX Limited (ASX:ASX) Fare As A Dividend Stock?

A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. ASX Limited (ASX:ASX) has returned to shareholders over the past 10 years, an average dividend yield of 5.00% annually. Should it have a place in your portfolio? Let’s take a look at ASX in more detail. Check out our latest analysis for ASX

5 checks you should use to assess 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 it paid dividend every year without dramatically reducing payout in the past?

  • Has it increased its dividend per share amount over the past?

  • 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?

ASX:ASX Historical Dividend Yield Jun 8th 18
ASX:ASX Historical Dividend Yield Jun 8th 18

How does ASX fare?

The current trailing twelve-month payout ratio for the stock is 89.94%, which means that the dividend is covered by earnings. Going forward, analysts expect ASX’s payout to remain around the same level at 89.66% of its earnings, which leads to a dividend yield of 3.65%. Furthermore, EPS should increase to A$2.45. 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. 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, ASX produces a yield of 3.35%, which is on the low-side for Capital Markets stocks.

Next Steps:

With this in mind, I definitely rank ASX 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, 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 fundamental factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for ASX’s future growth? Take a look at our free research report of analyst consensus for ASX’s outlook.

  2. Valuation: What is ASX 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 ASX 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.

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