A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. In the past 10 years Oxford Industries Inc (NYSE:OXM) has returned an average of 2.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Oxford Industries in more detail. View our latest analysis for Oxford Industries
5 questions to ask before buying 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?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Can it afford 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 Oxford Industries fare?
Oxford Industries has a trailing twelve-month payout ratio of 27.71%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 27.67%, leading to a dividend yield of around 1.67%. Moreover, EPS should increase to $4.46. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Although OXM’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, Oxford Industries produces a yield of 1.64%, which is high for Luxury stocks but still below the market’s top dividend payers.
Keeping in mind the dividend characteristics above, Oxford Industries is definitely worth considering for investors looking to build a dedicated income portfolio. 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. There are three pertinent factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for OXM’s future growth? Take a look at our free research report of analyst consensus for OXM’s outlook.
- Valuation: What is OXM 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 OXM 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 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.