PGG Wrightson Limited (NZE:PGW): What You Have To Know Before Buying For The Upcoming Dividend
Important news for shareholders and potential investors in PGG Wrightson Limited (NZSE:PGW): The dividend payment of NZ$0.02 per share will be distributed into shareholder on 05 April 2018, and the stock will begin trading ex-dividend at an earlier date, 15 March 2018. 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 PGG Wrightson’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for PGG Wrightson
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share amount increased over the past?
Is it 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 PGG Wrightson pass our checks?
The current trailing twelve-month payout ratio for the stock is 62.78%, which means that the dividend is covered by earnings. Going forward, analysts expect PGW’s payout to increase to 74.30% of its earnings, which leads to a dividend yield of around 6.43%. However, EPS is forecasted to fall to NZ$0.05 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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 PGG Wrightson 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, PGG Wrightson has a yield of 6.15%, which is on the low-side for Food stocks.
Next Steps:
Considering the dividend attributes we analyzed above, PGG Wrightson is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 essential factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for PGW’s future growth? Take a look at our free research report of analyst consensus for PGW’s outlook.
Historical Performance: What has PGW’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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.
