Clarkson PLC (LON:CKN) has pleased shareholders over the past 10 years, paying out an average dividend of 4.00% annually. The company is currently worth UK£781.71m, and now yields roughly 2.82%. Does Clarkson tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- 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?
Does Clarkson pass our checks?
The current trailing twelve-month payout ratio for the stock is 69.91%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 64.20%, leading to a dividend yield of around 3.23%. Moreover, EPS is forecasted to fall to £0.92 in the upcoming year.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. CKN has increased its DPS from £0.40 to £0.73 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, Clarkson generates a yield of 2.82%, which is high for Shipping stocks but still below the market’s top dividend payers.
Taking into account the dividend metrics, Clarkson ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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. Below, I’ve compiled three essential aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for CKN’s future growth? Take a look at our free research report of analyst consensus for CKN’s outlook.
- Valuation: What is CKN 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 CKN is currently mispriced by the market.
- Other 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 firstname.lastname@example.org.