Only 4 Days Left Before SNC-Lavalin Group Inc (TSE:SNC) Will Be Trading Ex-Dividend,
If you are interested in cashing in on SNC-Lavalin Group Inc’s (TSE:SNC) upcoming dividend of CA$0.29 per share, you only have 4 days left to buy the shares before its ex-dividend date, 14 November 2018, in time for dividends payable on the 29 November 2018. Should you diversify into SNC-Lavalin Group and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
View our latest analysis for SNC-Lavalin Group
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is its annual yield among the top 25% of dividend-paying companies?
Has it paid dividend every year without dramatically reducing payout in the past?
Has the amount of dividend per share grown over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How well does SNC-Lavalin Group fit our criteria?
The company currently pays out 60% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. However, going forward, analysts expect SNC’s payout to fall to 26% of its earnings, which leads to a dividend yield of around 2.5%. However, EPS should increase to CA$3.45, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. 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. SNC has increased its DPS from CA$0.48 to CA$1.15 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
In terms of its peers, SNC-Lavalin Group generates a yield of 2.5%, which is on the low-side for Construction stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank SNC-Lavalin Group 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. There are three fundamental factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for SNC’s future growth? Take a look at our free research report of analyst consensus for SNC’s outlook.
Valuation: What is SNC 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 SNC 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 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.
