Is Kimball International, Inc. (NASDAQ:KBAL) A Smart Pick For Income Investors?
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Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Historically, Kimball International, Inc. (NASDAQ:KBAL) has paid dividends to shareholders, and these days it yields 2.3%. Let's dig deeper into whether Kimball International should have a place in your portfolio.
Check out our latest analysis for Kimball International
5 checks you should do on 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 paid dividend every year without dramatically reducing payout in the past?
Has the amount of dividend per share grown over the past?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
Does Kimball International pass our checks?
Kimball International has a trailing twelve-month payout ratio of 31%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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. In the case of KBAL it has increased its DPS from $0.20 to $0.32 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
In terms of its peers, Kimball International generates a yield of 2.3%, which is high for Commercial Services stocks but still below the market's top dividend payers.
Next Steps:
Considering the dividend attributes we analyzed above, Kimball International is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, 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. I've put together three key factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for KBAL’s future growth? Take a look at our free research report of analyst consensus for KBAL’s outlook.
Valuation: What is KBAL 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 KBAL 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.
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.
