Attention dividend hunters! Public Service Enterprise Group Incorporated (NYSE:PEG) will be distributing its dividend of US$0.45 per share on the 28 September 2018, and will start trading ex-dividend in 2 days time on the 06 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Public Service Enterprise Group’s latest financial data to analyse its dividend characteristics.
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has the amount of dividend per share grown over the past?
- Is is able 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 does Public Service Enterprise Group fare?
Public Service Enterprise Group has a trailing twelve-month payout ratio of 40.8%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 56.8%, leading to a dividend yield of 3.6%. However, EPS is forecasted to fall to $3.16 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
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. In the case of PEG it has increased its DPS from $1.29 to $1.8 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, Public Service Enterprise Group has a yield of 3.4%, which is on the low-side for Integrated Utilities stocks.
Considering the dividend attributes we analyzed above, Public Service Enterprise Group is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three important factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for PEG’s future growth? Take a look at our free research report of analyst consensus for PEG’s outlook.
- Valuation: What is PEG 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 PEG 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 email@example.com.