Is Mineral Resources Limited (ASX:MIN) A Good Pick For Income Investors?
A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Mineral Resources Limited (ASX:MIN) has returned to shareholders over the past 10 years, an average dividend yield of 4.00% annually. Let’s dig deeper into whether Mineral Resources should have a place in your portfolio. View our latest analysis for Mineral Resources
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Does it pay an annual yield higher than 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share amount increased over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
How does Mineral Resources fare?
The current trailing twelve-month payout ratio for the stock is 50.16%, which means that the dividend is covered by earnings. Going forward, analysts expect MIN’s payout to remain around the same level at 50.69% of its earnings, which leads to a dividend yield of 4.87%. In addition to this, EPS should increase to A$1.34. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although MIN’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. Compared to its peers, Mineral Resources produces a yield of 3.52%, which is high for Metals and Mining stocks but still below the market’s top dividend payers.
Next Steps:
Keeping in mind the dividend characteristics above, Mineral Resources is definitely worth considering for investors looking to build a dedicated income portfolio. 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. I’ve put together three key aspects you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for MIN’s future growth? Take a look at our free research report of analyst consensus for MIN’s outlook.
2. Valuation: What is MIN 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 MIN is currently mispriced by the market.
3. 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.
