Only 2 Days Left Until National Bank of Canada (TSE:NA) Trades Ex-Dividend
Attention dividend hunters! National Bank of Canada (TSE:NA) will be distributing its dividend of CA$0.65 per share on the 01 February 2019, and will start trading ex-dividend in 2 days time on the 28 December 2018. Is this future income a persuasive enough catalyst for investors to think about National Bank of Canada as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
View our latest analysis for National Bank of Canada
Here’s how I find good dividend stocks
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it paying an annual yield above 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has the amount of dividend per share grown over the past?
Is is 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 National Bank of Canada pass our checks?
National Bank of Canada has a trailing twelve-month payout ratio of 41%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect NA’s payout to remain around the same level at 42% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 5.0%. Furthermore, EPS should increase to CA$6.38.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. NA has increased its DPS from CA$1.24 to CA$2.6 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, National Bank of Canada generates a yield of 4.7%, which is high for Banks stocks but still below the market’s top dividend payers.
Next Steps:
With these dividend metrics in mind, I definitely rank National Bank of Canada 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. There are three fundamental aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for NA’s future growth? Take a look at our free research report of analyst consensus for NA’s outlook.
Valuation: What is NA 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 NA 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.
