Attention dividend hunters! Adams Resources & Energy Inc (AMEX:AE) will be distributing its dividend of $0.22 per share on the 23 March 2018, and will start trading ex-dividend in 3 days time on the 08 March 2018. Is this future income a persuasive enough catalyst for investors to think about Adams Resources & Energy 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 Adams Resources & Energy
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How does Adams Resources & Energy fare?
Adams Resources & Energy has a negative payout ratio, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of AE it has increased its DPS from $0.47 to $0.88 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, Adams Resources & Energy has a yield of 2.24%, which is on the low-side for Oil and Gas stocks.
After digging a little deeper into Adams Resources & Energy’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. I’ve put together three pertinent factors you should further examine:
- Valuation: What is AE 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 AE is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Adams Resources & Energy’s board and the CEO’s back ground.
- 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.