Shares of Genworth MI Canada Inc (TSX:MIC) will begin trading ex-dividend in 3 days. To qualify for the dividend check of CA$0.47 per share, investors must have owned the shares prior to 16 February 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. What does this mean for current shareholders and potential investors? Below, I will explain how holding Genworth MI Canada can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Genworth MI Canada
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is their annual yield among the top 25% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has the amount of dividend per share grown over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Genworth MI Canada pass our checks?
The current trailing twelve-month payout ratio for the stock is 31.08%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 41.66%, leading to a dividend yield of 4.76%. However, EPS is forecasted to fall to CA$4.97 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Genworth MI Canada as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Genworth MI Canada has a yield of 4.59%, which is on the low-side for Mortgage stocks.
With this in mind, I definitely rank Genworth MI Canada as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, 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. I’ve put together three essential factors you should further examine:
- 1. Future Outlook: What are well-informed industry analysts predicting for MIC’s future growth? Take a look at our free research report of analyst consensus for MIC’s outlook.
- 2. Valuation: What is MIC 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 MIC is currently mispriced by the market.
- 3. 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 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.