Leon’s Furniture Limited (TSX:LNF): Ex-Dividend Is Coming In 3 Days, Should You Buy?
Investors who want to cash in on Leon’s Furniture Limited’s (TSX:LNF) upcoming dividend of CA$0.12 per share have only 3 days left to buy the shares before its ex-dividend date, 07 December 2017, in time for dividends payable on the 08 January 2018. So if you want to cash in on LNF’s dividend payment and are not yet a shareholder, you have only few days left! Today I am going to take a look at LNF’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Leon’s Furniture
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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 it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
How does Leon’s Furniture fare?
The current payout ratio for the stock is 33.48%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 36.14%, leading to a dividend yield of around 2.71%.
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 LNF it has increased its DPS from CA$0.28 to CA$0.48 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. Relative to peers, LNF generates a yield of 2.64%, which is high for specialty retail stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? Investors of Leon’s Furniture can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, LNF is one worth keeping around in your income portfolio. But, depending on your portfolio composition, it may be beneficial exploring other income stocks to enhance your diversification, or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? With these dividend metrics in mind, I definitely rank Leon’s Furniture as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Whether or not you like LNF as a dividend stock, it’s still worth checking the price tag. Is Leon’s Furniture overvalued or is it actually a bargain? Dig deeper in our latest free analysis to find out!
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.
