Loblaw Companies Limited (TSE:L): Ex-Dividend Is In 3 Days
Attention dividend hunters! Loblaw Companies Limited (TSE:L) will be distributing its dividend of CA$0.29 per share on the 01 October 2018, and will start trading ex-dividend in 3 days time on the 13 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Loblaw Companies’s latest financial data to analyse its dividend attributes.
Check out our latest analysis for Loblaw Companies
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is their annual yield among the top 25% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has it increased its dividend per share amount 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?
Does Loblaw Companies pass our checks?
The company currently pays out 32.1% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 23.8%, leading to a dividend yield of 1.8%. Moreover, EPS is also forecasted to fall to CA$2.75 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment 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. L has increased its DPS from CA$0.84 to CA$1.18 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, Loblaw Companies has a yield of 1.7%, which is high for Consumer Retailing stocks but still below the low risk savings rate.
Next Steps:
Considering the dividend attributes we analyzed above, Loblaw Companies 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 further examine:
Future Outlook: What are well-informed industry analysts predicting for L’s future growth? Take a look at our free research report of analyst consensus for L’s outlook.
Valuation: What is L 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 L 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 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 editorial-team@simplywallst.com.
