Is Jardine Cycle & Carriage Limited (SGX:C07) A Smart Choice For Dividend Investors?
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Jardine Cycle & Carriage Limited (SGX:C07) has returned to shareholders over the past 10 years, an average dividend yield of 4.00% annually. Does Jardine Cycle & Carriage tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Jardine Cycle & Carriage
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it the top 25% annual dividend yield payer?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has the amount of dividend per share grown over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
How well does Jardine Cycle & Carriage fit our criteria?
The current trailing twelve-month payout ratio for the stock is 46.25%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 39.40%, leading to a dividend yield of around 3.98%. However, EPS should increase to $2.2, 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. Although C07’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time.
Relative to peers, Jardine Cycle & Carriage produces a yield of 3.44%, which is on the low-side for Retail Distributors stocks.
Next Steps:
With this in mind, I definitely rank Jardine Cycle & Carriage as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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 fundamental aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for C07’s future growth? Take a look at our free research report of analyst consensus for C07’s outlook.
Valuation: What is C07 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 C07 is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
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.
