Over the past 10 years Polytec Holding AG (VIE:PYT) has returned an average of 3.0% per year from dividend payouts. The stock currently pays out a dividend yield of 4.2%, and has a market cap of €224.4m. Does Polytec Holding tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
Does Polytec Holding pass our checks?
Polytec Holding has a trailing twelve-month payout ratio of 30.6%, which means that the dividend is covered by earnings. Going forward, analysts expect PYT’s payout to remain around the same level at 28.8% of its earnings, which leads to a dividend yield of around 4.1%. Moreover, EPS is forecasted to fall to €1.42 in the upcoming year.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although PYT’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Polytec Holding generates a yield of 4.2%, which is high for Auto Components stocks.
With these dividend metrics in mind, I definitely rank Polytec Holding 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, 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 essential factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for PYT’s future growth? Take a look at our free research report of analyst consensus for PYT’s outlook.
- Valuation: What is PYT 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 PYT 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 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 email@example.com.