Investors who want to cash in on Maxim Integrated Products Inc’s (NASDAQ:MXIM) upcoming dividend of US$0.46 per share have only 2 days left to buy the shares before its ex-dividend date, 29 August 2018, in time for dividends payable on the 13 September 2018. Should you diversify into Maxim Integrated Products and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- 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 Maxim Integrated Products fit our criteria?
Maxim Integrated Products has a trailing twelve-month payout ratio of 99.8%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 54.3%, leading to a dividend yield of 3.0%. In addition to this, EPS should increase to $2.93, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of MXIM it has increased its DPS from $0.80 to $1.84 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. These are all positive signs of a great, reliable dividend stock.
Relative to peers, Maxim Integrated Products generates a yield of 3.0%, which is high for Semiconductor stocks but still below the market’s top dividend payers.
With these dividend metrics in mind, I definitely rank Maxim Integrated Products 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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three pertinent factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for MXIM’s future growth? Take a look at our free research report of analyst consensus for MXIM’s outlook.
- Valuation: What is MXIM 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 MXIM 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 firstname.lastname@example.org.