Is Pzena Investment Management Inc (NYSE:PZN) A Good Pick For Income Investors?
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. In the past 10 years Pzena Investment Management Inc (NYSE:PZN) has returned an average of 3.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Pzena Investment Management in more detail. Check out our latest analysis for Pzena Investment Management
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it paying an annual yield above 75% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Is its earnings sufficient to payout dividend at the current rate?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Pzena Investment Management pass our checks?
Pzena Investment Management has a trailing twelve-month payout ratio of 33.42%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 9.25%, leading to a dividend yield of 0.0071%.
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. Dividend payments from Pzena Investment Management have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. 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, Pzena Investment Management has a yield of 2.90%, which is high for Capital Markets stocks but still below the market’s top dividend payers.
Next Steps:
Taking all the above into account, Pzena Investment Management is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. Below, I’ve compiled three relevant aspects you should look at:
1. Valuation: What is PZN 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 PZN is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Pzena Investment Management’s board and the CEO’s back ground.
3. 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.
