Should Income Investors Buy Speedway Motorsports Inc (TRK) Before Its Ex-Dividend?
Attention dividend hunters! Speedway Motorsports Inc (NYSE:TRK) will be distributing its dividend of $0.15 per share in 3 days time, on the 01 December 2017, and will start trading ex-dividend on the 09 November 2017. What does this mean for current shareholders and potential investors? Below, I will explain how holding TRK can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Speedway Motorsports
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is its annual yield among the top 25% of dividend-paying companies?
Does it consistently pay out dividends without missing a payment or significantly cutting payout?
Has dividend per share amount increased over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will the company be able to keep paying dividend based on the future earnings growth?
Does Speedway Motorsports pass our checks?
The company currently pays out 70.67% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. Looking forward, analysts expect TRK to pay out 47.26% of its earnings and dividends yield to be around 3.08%. Furthermore, EPS should increase to $0.96. 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. TRK has increased its DPS from $0.34 to $0.6 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. Compared to its peers, TRK generates a yield of 3.08%, which is high for hotels, restaurants and leisure stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? Investors of Speedway Motorsports can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, TRK is one worth keeping around in your income portfolio. But, depending on your current holdings, it may be valuable exploring other dividend stocks to increase diversification, or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue 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? With this in mind, I definitely rank Speedway Motorsports as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Another aspect to consider for TRK is how much it’s actually worth. Is Speedway Motorsports overvalued or is it actually a bargain? Dig deeper in 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.
