Only 3 Days Left To Polaris Infrastructure Inc (TSE:PIF)’s Ex-Dividend Date, Is It Worth Buying?
On the 27 February 2018, Polaris Infrastructure Inc (TSX:PIF) will be paying shareholders an upcoming dividend amount of $0.15 per share. However, investors must have bought the company’s stock before 15 February 2018 in order to qualify for the payment. That means you have only 3 days left! Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Polaris Infrastructure’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Polaris Infrastructure
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Does it pay an annual yield higher than 75% 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 it able to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How does Polaris Infrastructure fare?
PIF currently pays out twice what it is earning, according to its trailing twelve-month data, meaning that the dividend is predominantly funded by retained earnings. However, going forward, analysts expect PIF’s payout to fall into a more sustainable range of 47.49% of its earnings, which leads to a dividend yield of 3.93%. In addition to this, EPS should increase to $0.68, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. Unfortunately, it is really too early to view Polaris Infrastructure as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Polaris Infrastructure has a yield of 3.78%, which is on the low-side for Renewable Energy stocks.
Next Steps:
If Polaris Infrastructure is in your portfolio for cash-generating reasons, there may be better alternatives out there. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. Below, I’ve compiled three important factors you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for PIF’s future growth? Take a look at our free research report of analyst consensus for PIF’s outlook.
2. Valuation: What is PIF 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 PIF is currently mispriced by the market.
3. 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.
