Important news for shareholders and potential investors in Capitol Federal Financial Inc (NASDAQ:CFFN): The dividend payment of $0.29 per share will be distributed into shareholder on 01 December 2017, and the stock will begin trading ex-dividend at an earlier date, 16 November 2017. Is this future income a persuasive enough catalyst for investors to think about CFFN 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 Capitol Federal Financial
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- 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 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?
Does Capitol Federal Financial pass our checks?
The company currently pays out 54.21% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 132.35% and dividends yield to be around 6.64%. Furthermore, EPS should increase to $0.65. This means shareholders should be concerned with the company’s ability to continue paying. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Capitol Federal Financial fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, Capitol Federal Financial produces a yield of 6.59%, which is high for thrifts and mortgage finance stocks.
What this means for you:
Are you a shareholder? If CFFN is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be valuable exploring other income stocks as alternatives to CFFN or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? If you are building an income portfolio, then Capitol Federal Financial is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, CFFN could still be an interesting investment opportunity. As with all investments, 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. Dig deeping in our latest free fundmental analysis to explore other aspects of CFFN.
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.