Hargreaves Services Plc (LON:HSP): Ex-Dividend Is Coming In 3 Days, Should You Buy?
Investors who want to cash in on Hargreaves Services Plc’s (AIM:HSP) upcoming dividend of £0.03 per share have only 3 days left to buy the shares before its ex-dividend date, 22 February 2018, in time for dividends payable on the 06 April 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Hargreaves Services’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Hargreaves Services
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Does it pay an annual yield higher than 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share amount increased over the past?
Is is able to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
Does Hargreaves Services pass our checks?
The current trailing twelve-month payout ratio for the stock is 59.07%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 37.56%, leading to a dividend yield of around 2.36%. Moreover, EPS is also forecasted to fall to £0.12 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from Hargreaves Services have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends. Compared to its peers, Hargreaves Services produces a yield of 2.08%, which is on the low-side for Oil and Gas stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Hargreaves Services for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that 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. There are three pertinent aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for HSP’s future growth? Take a look at our free research report of analyst consensus for HSP’s outlook.
2. Valuation: What is HSP 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 HSP is currently mispriced by the market.
3. 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 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.
