Investors who want to cash in on California Water Service Group’s (NYSE:CWT) upcoming dividend of $0.18 per share have only 3 days left to buy the shares before its ex-dividend date, 03 November 2017, in time for dividends payable on the 17 November 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine CWT’s latest financial data to analyse its dividend characteristics. View our latest analysis for California Water Service Group
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:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How does California Water Service Group fare?
The company currently pays out 49.85% of its earnings as a dividend, which means that the dividend is covered by earnings. Looking forward, analysts expect CWT to pay out 47.83% of its earnings leading to a dividend yield of 1.70%. Furthermore, EPS should decrease to $1.41. This means the company should be able to continue to payout dividends. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. CWT has increased its DPS from $0.58 to $0.72 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes CWT a true dividend rockstar. In terms of its peers, California Water Service Group produces a yield of 1.67%, which is on the low-side for a water utilities stock.
What this means for you:
Are you a shareholder? If CWT is in your portfolio for cash-generating reasons, there may be better alternatives out there, preferably ones with a more robust and increasing payout over time. It may be valuable exploring other income stocks as alternatives to CWT or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? If you are building an income portfolio, then California Water Service Group is probably not the best choice. But if you are not exclusively a dividend investor, CWT could still be an interesting investment opportunity. As with all investments, 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. Check our latest free fundmental analysis to explore other aspects of CWT.
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.