Is Nasdaq Inc (NASDAQ:NDAQ) A Smart Choice For Dividend Investors?
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Nasdaq Inc (NASDAQ:NDAQ) has returned to shareholders over the past 6 years, an average dividend yield of 2.00% annually. Should it have a place in your portfolio? Let’s take a look at Nasdaq in more detail. Check out our latest analysis for Nasdaq
5 questions I ask before picking 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 paid dividend every year without dramatically reducing payout in the past?
Has the amount of dividend per share grown over the past?
Is it able to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
Does Nasdaq pass our checks?
Nasdaq has a trailing twelve-month payout ratio of 33.09%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 33.88%, leading to a dividend yield of 2.10%. Furthermore, EPS should increase to $4.47. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Nasdaq as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Nasdaq generates a yield of 2.05%, which is on the low-side for Capital Markets stocks.
Next Steps:
Whilst there are few things you may like about Nasdaq from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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 pertinent factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for NDAQ’s future growth? Take a look at our free research report of analyst consensus for NDAQ’s outlook.
Valuation: What is NDAQ 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 NDAQ is currently mispriced by the market.
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.
