H&E Equipment Services Inc (NASDAQ:HEES): What You Have To Know Before Buying For The Upcoming Dividend
If you are interested in cashing in on H&E Equipment Services Inc’s (NASDAQ:HEES) upcoming dividend of US$0.28 per share, you only have 2 days left to buy the shares before its ex-dividend date, 20 August 2018, in time for dividends payable on the 07 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into H&E Equipment Services’s latest financial data to analyse its dividend attributes.
See our latest analysis for H&E Equipment Services
Here’s how I find good dividend stocks
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is their annual yield among the top 25% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share risen in the past couple of years?
Can it afford to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does H&E Equipment Services fit our criteria?
The current trailing twelve-month payout ratio for the stock is 31.41%, which means that the dividend is covered by earnings. Going forward, analysts expect HEES’s payout to increase to 34.62% of its earnings, which leads to a dividend yield of around 2.88%. However, EPS is forecasted to fall to $2.13 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider H&E Equipment Services as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, H&E Equipment Services produces a yield of 3.21%, which is high for Trade Distributors stocks but still below the market’s top dividend payers.
Next Steps:
If H&E Equipment Services is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. I’ve put together three essential aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for HEES’s future growth? Take a look at our free research report of analyst consensus for HEES’s outlook.
Valuation: What is HEES 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 HEES is currently mispriced by the market.
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 editorial-team@simplywallst.com.
