Over the past 10 years Dunelm Group plc (LSE:DNLM) has grown its dividend payouts from £0.04 to £0.25. With a market cap of £1.26B, Dunelm Group pays out 71.71% of its earnings, leading to a 3.98% yield. Let me elaborate on you why the stock stands out for income investors like myself. View our latest analysis for Dunelm Group
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically: It is paying an annual yield above 75% of dividend payers It has paid dividend every year without dramatically reducing payout in the past Its has increased its dividend per share amount over the past It is able to pay the current rate of dividends from its earnings It is able to continue to payout at the current rate in the future
High Yield And Dependable
Dunelm Group’s yield sits at 3.98%, which is high for Specialty Retail stocks. But the real reason Dunelm Group stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of DNLM it has increased its DPS from £0.04 to £0.25 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Dunelm Group has a trailing twelve-month payout ratio of 71.71%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect DNLM’s payout to fall to 54.83% of its earnings, which leads to a dividend yield of 4.64%. However, EPS should increase to £0.47, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
Dunelm Group’s strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given 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. Below, I’ve compiled three relevant aspects you should further research:
- 1. Future Outlook: What are well-informed industry analysts predicting for DNLM’s future growth? Take a look at our free research report of analyst consensus for DNLM’s outlook.
- 2. Valuation: What is DNLM 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 DNLM is currently mispriced by the market.
- 3. Other Dividend Rockstars: Are there strong dividend payers with better 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.