On the 31 August 2018, Wilmar International Limited (SGX:F34) will be paying shareholders an upcoming dividend amount of US$0.035 per share. However, investors must have bought the company’s stock before 20 August 2018 in order to qualify for the payment. That means you have only 2 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Wilmar International’s latest financial data to analyse its dividend attributes.
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it the top 25% annual dividend yield payer?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share risen in the past couple of years?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
Does Wilmar International pass our checks?
Wilmar International has a trailing twelve-month payout ratio of 37.21%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect F34’s payout to remain around the same level at 40.19% of its earnings, which leads to a dividend yield of 3.49%. In addition to this, EPS is forecasted to fall to $0.19 in the upcoming year.
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 F34’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Relative to peers, Wilmar International generates a yield of 3.04%, which is high for Food stocks but still below the market’s top dividend payers.
Taking into account the dividend metrics, Wilmar International ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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. There are three important aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for F34’s future growth? Take a look at our free research report of analyst consensus for F34’s outlook.
- Valuation: What is F34 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 F34 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 email@example.com.