On the 05 January 2018, Insteel Industries Inc (NASDAQ:IIIN) will be paying shareholders an upcoming dividend amount of $1.03 per share. However, investors must have bought the company’s stock before 19 December 2017 in order to qualify for the payment. That means you have only 3 days left! Is this future income a persuasive enough catalyst for investors to think about Insteel 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. See our latest analysis for Insteel Industries
How I analyze a dividend stock
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?
- Does it consistently pay out dividends without missing a payment or significantly cutting payout?
- Has the amount of dividend per share grown over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How well does Insteel Industries fit our criteria?
Insteel Industries has a payout ratio of 10.12%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 4.84%, leading to a dividend yield of around 2.28%. However, EPS should increase to $1.54, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. Compared to its peers, Insteel Industries produces a yield of 4.13%, which is high for building stocks.
What this means for you:
Are you a shareholder? With Insteel Industries 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 robust dividend generator moving forward. However, depending on your portfolio composition, it may be beneficial exploring other dividend stocks to enhance your diversification, or even look at high-growth stocks to supplement your steady income stocks. I recommend 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? With these dividend metrics in mind, I definitely rank Insteel Industries as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 the stock is, it is not worth an infinite price. Can you still benefit from a mispricing of the stock? 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.