Kronos Worldwide, Inc. (NYSE:KRO) is a true Dividend Rock Star. Its yield of 5.2% makes it one of the market’s top dividend payer. In the past ten years, Kronos Worldwide has also grown its dividend from $0.50 to $0.68. Below, I have outlined more attractive dividend aspects for Kronos Worldwide for income investors who may be interested in new dividend stocks for their portfolio.
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What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically:
It is paying an annual yield above 75% of dividend payers
It has paid dividend every year without dramatically reducing payout in the past
Its has increased its dividend per share amount over the past
It can afford to pay the current rate of dividends from its earnings
It has the ability to keep paying its dividends going forward
High Yield And Dependable
Kronos Worldwide’s yield sits at 5.2%, which is high for Chemicals stocks. But the real reason Kronos Worldwide stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
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 KRO it has increased its DPS from $0.50 to $0.68 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes KRO a true dividend rockstar.
The company currently pays out 33% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 65% which, assuming the share price stays the same, leads to a dividend yield of 5.7%.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
Kronos Worldwide’s strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given 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 fundamental aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for KRO’s future growth? Take a look at our free research report of analyst consensus for KRO’s outlook.
Valuation: What is KRO 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 KRO is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.