If you are interested in cashing in on HNI Corporation’s (NYSE:HNI) upcoming dividend of $0.3 per share, you only have 3 days left to buy the shares before its ex-dividend date, 17 May 2018, in time for dividends payable on the 01 June 2018. Is this future income a persuasive enough catalyst for investors to think about HNI 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. Check out our latest analysis for HNI
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Does it pay an annual yield higher than 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 it able to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does HNI pass our checks?
The current trailing twelve-month payout ratio for the stock is 56.91%, which means that the dividend is covered by earnings. However, going forward, analysts expect HNI’s payout to fall to 39.59% of its earnings, which leads to a dividend yield of around 3.46%. However, EPS should increase to $2.64, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. HNI has increased its DPS from $0.86 to $1.18 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes HNI a true dividend rockstar. In terms of its peers, HNI generates a yield of 3.28%, which is high for Commercial Services stocks but still below the market’s top dividend payers.
With these dividend metrics in mind, I definitely rank HNI 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, 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. Below, I’ve compiled three fundamental factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for HNI’s future growth? Take a look at our free research report of analyst consensus for HNI’s outlook.
- Valuation: What is HNI 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 HNI 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 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.