Only 4 Days Left Before Monadelphous Group Limited (ASX:MND) Will Be Trading Ex-Dividend,
Shares of Monadelphous Group Limited (ASX:MND) will begin trading ex-dividend in 4 days. To qualify for the dividend check of AU$0.32 per share, investors must have owned the shares prior to 13 September 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. 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 Monadelphous Group’s most recent financial data to examine its dividend characteristics in more detail.
See our latest analysis for Monadelphous Group
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?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
Does Monadelphous Group pass our checks?
The current trailing twelve-month payout ratio for the stock is 81.5%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 83.8%, leading to a dividend yield of around 4.9%. In addition to this, EPS is forecasted to fall to A$0.69 in the upcoming year.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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. Not only have dividend payouts from Monadelphous Group fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.
Relative to peers, Monadelphous Group generates a yield of 4.5%, which is high for Construction stocks but still below the market’s top dividend payers.
Next Steps:
Whilst there are few things you may like about Monadelphous Group from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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 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 research:
Future Outlook: What are well-informed industry analysts predicting for MND’s future growth? Take a look at our free research report of analyst consensus for MND’s outlook.
Valuation: What is MND 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 MND is currently mispriced by the market.
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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
