Should Income Investors Buy Exco Technologies Limited (TSX:XTC) Before Its Ex-Dividend?
Shares of Exco Technologies Limited (TSX:XTC) will begin trading ex-dividend in 3 days. To qualify for the dividend check of CA$0.08 per share, investors must have owned the shares prior to 12 December 2017, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. So if you want to cash in on XTC’s dividend payment and are not yet a shareholder, you have only few days left! Today I am going to take a look at XTC’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Exco Technologies
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically: Its annual yield is among the top 25% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its dividend per share amount has increased over the past It is able to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward
High Yield And Dependable
As previously mentioned, the company’s dividend yield stands at 3.33%, which is high for machinery stocks. But the real reason Exco Technologies stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. XTC has increased its DPS from CA$0.06 to CA$0.32 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. The company currently pays out 31.06% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 25.36%, leading to a dividend yield of 3.33%. However, EPS should increase to CA$1.01, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
What this means for you:
Are you a shareholder? With Exco Technologies producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a top dividend generator moving forward. However, depending on your current portfolio, it may be worth exploring other dividend stocks to increase diversification, or even look at high-growth stocks to complement your steady income stocks. I suggest continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? There aren’t many other stocks out there with the same track record as Exco Technologies, so I would certainly recommend further examining the stock if its dividend characteristics appeal to you. 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. No matter how much of a cash cow Exco Technologies is, it is not worth an infinite price. Is Exco Technologies overvalued or is it actually a bargain? Check our latest free analysis to find out!
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.
