Is Kingstone Companies Inc (NASDAQ:KINS) 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. Kingstone Companies Inc (NASDAQ:KINS) has returned to shareholders over the past 7 years, an average dividend yield of 3.00% annually. Let’s dig deeper into whether Kingstone Companies should have a place in your portfolio. See our latest analysis for Kingstone Companies
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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 the amount of dividend per share grown 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 Kingstone Companies fare?
The current trailing twelve-month payout ratio for the stock is 31.47%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect KINS’s payout to fall to 22.86% of its earnings, which leads to a dividend yield of around 2.35%. However, EPS should increase to $1.2, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Kingstone Companies as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Kingstone Companies produces a yield of 2.35%, which is on the low-side for Insurance stocks.
Next Steps:
If Kingstone Companies 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 recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three key factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for KINS’s future growth? Take a look at our free research report of analyst consensus for KINS’s outlook.
Valuation: What is KINS 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 KINS 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.
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.
