Are You An Income Investor? Don’t Miss Out On City of London Investment Group PLC (LON:CLIG)
Over the past 10 years City of London Investment Group PLC (LSE:CLIG) has returned an average of 7.00% per year from dividend payouts. The company is currently worth UK£109.99M, and now yields roughly 5.91%. Does City of London Investment Group tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View our latest analysis for City of London Investment Group
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it paying an annual yield above 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share risen in the past couple of years?
Is it able to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does City of London Investment Group fit our criteria?
City of London Investment Group has a trailing twelve-month payout ratio of 65.93%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 71.18%, leading to a dividend yield of around 6.72%.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although CLIG’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, City of London Investment Group produces a yield of 5.91%, which is high for Capital Markets stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank City of London Investment Group as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. I’ve put together three important aspects you should look at:
Valuation: What is CLIG 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 CLIG is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on City of London Investment Group’s board and the CEO’s back ground.
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 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.
