Attention dividend hunters! Schlumberger Limited (NYSE:SLB) will be distributing its dividend of $0.5 per share on the 13 July 2018, and will start trading ex-dividend in 3 days time on the 05 June 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 Schlumberger’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Schlumberger
Here’s how I find good dividend stocks
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Schlumberger pass our checks?
Schlumberger has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. SLB has increased its DPS from $0.84 to $2 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 SLB a true dividend rockstar. Relative to peers, Schlumberger generates a yield of 2.88%, which is high for Energy Services stocks but still below the market’s top dividend payers.
Keeping in mind the dividend characteristics above, Schlumberger is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three fundamental aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for SLB’s future growth? Take a look at our free research report of analyst consensus for SLB’s outlook.
- Valuation: What is SLB 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 SLB 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 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.