Investors who want to cash in on Chicago Rivet & Machine Co.’s (NYSEMKT:CVR) upcoming dividend of US$0.52 per share have only 4 days left to buy the shares before its ex-dividend date, 04 March 2019, in time for dividends payable on the 20 March 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Chicago Rivet & Machine’s latest financial data to analyse its dividend attributes.
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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?
Is is 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?
Does Chicago Rivet & Machine pass our checks?
Chicago Rivet & Machine has a trailing twelve-month payout ratio of 32%, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
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. Although CVR’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Relative to peers, Chicago Rivet & Machine generates a yield of 4.1%, which is high for Machinery stocks.
Taking into account the dividend metrics, Chicago Rivet & Machine ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three essential aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for CVR’s future growth? Take a look at our free research report of analyst consensus for CVR’s outlook.
Valuation: What is CVR 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 CVR 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.