Interested In SSAB AB (publ) (STO:SSAB A)’s Upcoming kr1.50 Dividend? You Have 3 Days Left
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If you are interested in cashing in on SSAB AB (publ)'s (STO:SSAB A) upcoming dividend of kr1.50 per share, you only have 3 days left to buy the shares before its ex-dividend date, 09 April 2019, in time for dividends payable on the 15 April 2019. 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 SSAB's most recent financial data to examine its dividend characteristics in more detail.
View our latest analysis for SSAB
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Does it pay an annual yield higher than 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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?
How does SSAB fare?
The company currently pays out 44% 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 SSAB A's payout to increase to 53% of its earnings. Assuming a constant share price, this equates to a dividend yield of 4.3%. In addition to this, EPS should increase to SEK3.63. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. Dividend payments from SSAB have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
Relative to peers, SSAB produces a yield of 4.0%, which is on the low-side for Metals and Mining stocks.
Next Steps:
If SSAB is in your portfolio for cash-generating reasons, there may be better alternatives out there. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I've put together three essential aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for SSAB A’s future growth? Take a look at our free research report of analyst consensus for SSAB A’s outlook.
Valuation: What is SSAB A 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 SSAB A is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
