Only 2 Days Left To Cash In On Ferrexpo Plc (LON:FXPO) Dividend, Should You Buy?
Important news for shareholders and potential investors in Ferrexpo Plc (LON:FXPO): The dividend payment of US$0.033 per share will be distributed into shareholder on 26 September 2018, and the stock will begin trading ex-dividend at an earlier date, 23 August 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Ferrexpo’s most recent financial data to examine its dividend characteristics in more detail.
See our latest analysis for Ferrexpo
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it the top 25% annual dividend yield payer?
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?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Ferrexpo fit our criteria?
Ferrexpo has a trailing twelve-month payout ratio of 11.73%, which means that the dividend is covered by earnings. Going forward, analysts expect FXPO’s payout to increase to 32.24% of its earnings, which leads to a dividend yield of around 5.84%. However, EPS is forecasted to fall to $0.47 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
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. Although FXPO’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, Ferrexpo has a yield of 8.16%, which is high for Metals and Mining stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Ferrexpo 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. Below, I’ve compiled three essential aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for FXPO’s future growth? Take a look at our free research report of analyst consensus for FXPO’s outlook.
Valuation: What is FXPO 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 FXPO 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.
