If you are interested in cashing in on Investment Technology Group Inc’s (NYSE:ITG) upcoming dividend of $0.07 per share, you only have 3 days left to buy the shares before its ex-dividend date, 27 November 2017, in time for dividends payable on the 15 December 2017. What does this mean for current shareholders and potential investors? Below, I will explain how holding ITG can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for ITG
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown 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?
How well does Investment Technology Group fit our criteria?
Investment Technology Group has a negative payout ratio, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. 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. The reality is that it is too early to consider Investment Technology Group as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, ITG has a yield of 1.54%, which is on the low-side for capital markets stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in ITG right now, in terms of its dividend attributes. It may be valuable exploring other dividend stocks as alternatives to ITG or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? After digging a little deeper into ITG’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, ITG could still be offering some interesting investment opportunities. 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. Take a look at our latest free fundmental analysis to explore other aspects of ITG.
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.