Investors who want to cash in on ESSA Bancorp Inc’s (NASDAQ:ESSA) upcoming dividend of $0.09 per share have only 3 days left to buy the shares before its ex-dividend date, 14 December 2017, in time for dividends payable on the 30 December 2017. Is this future income a persuasive enough catalyst for investors to think about ESSA as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for ESSA
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share risen in the past couple of years?
- Does earnings amply cover its dividend payments?
- Will it be able to continue to payout at the current rate in the future?
How does ESSA Bancorp fare?
The company currently pays out 52.01% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. 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. In the case of ESSA it has increased its DPS from $0.16 to $0.36 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. In terms of its peers, ESSA generates a yield of 2.30%, which is on the low-side for thrifts and mortgage finance stocks.
What this means for you:
Are you a shareholder?
Are you a shareholder? With ESSA Bancorp producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. However, depending on your current portfolio, it may be worth exploring other income stocks to enhance your diversification, or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Considering the dividend attributes we analyzed above, ESSA is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Another aspect to consider for ESSA is how much it’s actually worth. Is ESSA still a bargain? Check our latest free analysis to find out!
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.