Is Outokumpu Oyj (HEL:OUT1V) A Smart Choice For Dividend Investors?
A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Outokumpu Oyj (HEL:OUT1V) has returned to shareholders over the past 10 years, an average dividend yield of 3.00% annually. Should it have a place in your portfolio? Let’s take a look at Outokumpu Oyj in more detail. Check out our latest analysis for Outokumpu Oyj
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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 dividend per share risen in the past couple of years?
Can it afford to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
How does Outokumpu Oyj fare?
The current trailing twelve-month payout ratio for the stock is 39.80%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 36.25%, leading to a dividend yield of 4.59%. Furthermore, EPS is forecasted to fall to €0.49 in the upcoming year.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Outokumpu Oyj fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
In terms of its peers, Outokumpu Oyj generates a yield of 4.70%, which is high for Metals and Mining stocks but still below the market’s top dividend payers.
Next Steps:
If you are building an income portfolio, then Outokumpu Oyj is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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 fundamental aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for OUT1V’s future growth? Take a look at our free research report of analyst consensus for OUT1V’s outlook.
Valuation: What is OUT1V 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 OUT1V 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 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.
