Attention dividend hunters! Schnitzer Steel Industries Inc (NASDAQ:SCHN) will be distributing its dividend of $0.19 per share on the 29 May 2018, and will start trading ex-dividend in 3 days time on the 11 May 2018. Is this future income a persuasive enough catalyst for investors to think about Schnitzer Steel Industries as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for Schnitzer Steel Industries
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it the top 25% annual dividend yield payer?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
How does Schnitzer Steel Industries fare?
The company currently pays out 22.02% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect SCHN’s payout to increase to 25.59% of its earnings, which leads to a dividend yield of around 2.51%. However, EPS is forecasted to fall to $3.04 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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. SCHN has increased its DPS from $0.07 to $0.75 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. These are all positive signs of a great, reliable dividend stock. Relative to peers, Schnitzer Steel Industries generates a yield of 2.50%, which is on the low-side for Metals and Mining stocks.
With these dividend metrics in mind, I definitely rank Schnitzer Steel Industries 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. Below, I’ve compiled three important factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for SCHN’s future growth? Take a look at our free research report of analyst consensus for SCHN’s outlook.
- Valuation: What is SCHN 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 SCHN 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.