Grab SAF-Holland S.A. (FRA:SFQ) Today With A Solid 4.1% Dividend Yield
SAF-Holland S.A. (FRA:SFQ) is a true Dividend Rock Star. Its yield of 4.1% makes it one of the market’s top dividend payer. In the past ten years, SAF-Holland has also grown its dividend from €0.42 to €0.45. Below, I have outlined more attractive dividend aspects for SAF-Holland for income investors who may be interested in new dividend stocks for their portfolio.
See our latest analysis for SAF-Holland
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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:
It is paying an annual yield above 75% 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
SAF-Holland currently yields 4.1%, which is high for Auto Components stocks. But the real reason SAF-Holland 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.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. SFQ has increased its DPS from €0.42 to €0.45 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.
SAF-Holland has a trailing twelve-month payout ratio of 42%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 41% which, assuming the share price stays the same, leads to a dividend yield of 5.8%. Moreover, EPS should increase to €1.29.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Next Steps:
SAF-Holland ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three key factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for SFQ’s future growth? Take a look at our free research report of analyst consensus for SFQ’s outlook.
Valuation: What is SFQ 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 SFQ 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.
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 editorial-team@simplywallst.com.
