If you are interested in cashing in on Rocky Mountain Chocolate Factory Inc’s (NASDAQ:RMCF) upcoming dividend of $0.12 per share, you only have 3 days left to buy the shares before its ex-dividend date, 05 March 2018, in time for dividends payable on the 16 March 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 Rocky Mountain Chocolate Factory’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Rocky Mountain Chocolate Factory
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Does it pay an annual yield higher than 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 amount increased over the past?
- 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?
How well does Rocky Mountain Chocolate Factory fit our criteria?
The current trailing twelve-month payout ratio for the stock is 87.41%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. RMCF has increased its DPS from $0.4 to $0.48 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. This is an impressive feat, which makes RMCF a true dividend rockstar. Relative to peers, Rocky Mountain Chocolate Factory generates a yield of 3.93%, which is high for Food stocks.
Considering the dividend attributes we analyzed above, Rocky Mountain Chocolate Factory is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three essential factors you should further examine:
- Valuation: What is RMCF 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 RMCF 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 Rocky Mountain Chocolate Factory’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.