Investors who want to cash in on National HealthCare Corporation’s (NYSEMKT:NHC) upcoming dividend of US$0.50 per share have only 1 days left to buy the shares before its ex-dividend date, 28 June 2018, in time for dividends payable on the 31 August 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine National HealthCare’s latest financial data to analyse its dividend characteristics. View out our latest analysis for National HealthCare
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share amount increased over the past?
- Can it afford 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?
How well does National HealthCare fit our criteria?
The current trailing twelve-month payout ratio for the stock is 71.73%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of NHC it has increased its DPS from $0.96 to $2 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. This is an impressive feat, which makes NHC a true dividend rockstar.
In terms of its peers, National HealthCare generates a yield of 2.76%, which is high for Healthcare stocks but still below the market’s top dividend payers.
Considering the dividend attributes we analyzed above, National HealthCare is definitely worth keeping an eye on for someone 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 important aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for NHC’s future growth? Take a look at our free research report of analyst consensus for NHC’s outlook.
- Valuation: What is NHC 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 NHC 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.