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Interested In Fairfax Financial Holdings Limited (TSE:FFH)’s Upcoming $10 Dividend? You Have 6 Days Left

Investors who want to cash in on Fairfax Financial Holdings Limited’s (TSX:FFH) upcoming dividend of $10 per share have only 6 days left to buy the shares before its ex-dividend date, 17 January 2018, in time for dividends payable on the 25 January 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Fairfax Financial Holdings can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for Fairfax Financial Holdings

5 checks you should do on a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

  • Is its annual yield among the top 25% of dividend-paying companies?

  • Has it paid dividend every year without dramatically reducing payout in the past?

  • Has dividend per share amount increased over the past?

  • Is is able 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?

TSX:FFH Historical Dividend Yield Jan 11th 18
TSX:FFH Historical Dividend Yield Jan 11th 18

How well does Fairfax Financial Holdings fit our criteria?

Fairfax Financial Holdings has a payout ratio of 192.93%, which means that the dividend is not well-covered by its earnings. However, going forward, analysts expect FFH’s payout to fall into a more sustainable range of 38.73% of its earnings, which leads to a dividend yield of 2.05%. Furthermore, EPS should increase to $53.21, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. FFH has increased its DPS from $5 to $10 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Relative to peers, Fairfax Financial Holdings has a yield of 1.56%, which is on the low-side for insurance stocks.

What this means for you:

Are you a shareholder? Whilst there are few things you may like about Fairfax Financial Holdings from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. It may be beneficial exploring other income stocks as alternatives to Fairfax Financial Holdings 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? If you are building an income portfolio, then Fairfax Financial Holdings is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Take a look at our latest free fundmental analysis to explore other aspects of Fairfax Financial Holdings.


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.

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