Grab MyState Limited (ASX:MYS) Today With A Solid 6.8% Dividend Yield
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MyState Limited (ASX:MYS) is a true Dividend Rock Star. Its yield of 6.8% makes it one of the market's top dividend payer. In the past ten years, MyState has also grown its dividend from A$0.10 to A$0.29. Below, I have outlined more attractive dividend aspects for MyState for income investors who may be interested in new dividend stocks for their portfolio.
See our latest analysis for MyState
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically:
Its annual yield is among the top 25% of dividend payers
It consistently pays out dividend without missing a payment or significantly cutting payout
Its dividend per share amount has increased 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
The company's dividend yield stands at 6.8%, which is high for Mortgage stocks. But the real reason MyState stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.
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 MYS it has increased its DPS from A$0.10 to A$0.29 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.
The current trailing twelve-month payout ratio for the stock is 86%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 88% which, assuming the share price stays the same, leads to a dividend yield of 7.1%. In addition to this, EPS should increase to A$0.34.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
Next Steps:
Investors of MyState can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then MyState is one worth keeping around. However, given 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. Below, I've compiled three important aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for MYS’s future growth? Take a look at our free research report of analyst consensus for MYS’s outlook.
Valuation: What is MYS 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 MYS is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
