There is a lot to be liked about Hero MotoCorp Limited (NSEI:HEROMOTOCO) as an income stock, over the past 10 years it has returned an average of 3.00% per year. The stock currently pays out a dividend yield of 2.27%, and has a market cap of ₹747.31B. Should it have a place in your portfolio? Let’s take a look at Hero MotoCorp in more detail. Check out our latest analysis for Hero MotoCorp
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it be able to continue to payout at the current rate in the future?
How well does Hero MotoCorp fit our criteria?
The company currently pays out 47.36% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect HEROMOTOCO’s payout to remain around the same level at 49.56% of its earnings, which leads to a dividend yield of 2.84%. Furthermore, EPS should increase to ₹184.43. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, Hero MotoCorp has a yield of 2.27%, which is high for Auto stocks.
With these dividend metrics in mind, I definitely rank Hero MotoCorp as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. There are three relevant aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for HEROMOTOCO’s future growth? Take a look at our free research report of analyst consensus for HEROMOTOCO’s outlook.
- Valuation: What is HEROMOTOCO 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 HEROMOTOCO 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 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.