Have you been keeping an eye on The Andersons Inc’s (NASDAQ:ANDE) upcoming dividend of $0.17 per share payable on the 23 January 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 29 December 2017. Should you diversify into Andersons and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for Andersons
5 checks you should do on 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 its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount 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?
How does Andersons fare?
The current payout ratio for ANDE is negative, which means that it is loss-making, and paying its dividend from its retained earnings. 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. ANDE has increased its DPS from $0.21 to $0.66 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes ANDE a true dividend rockstar. Compared to its peers, Andersons has a yield of 2.07%, which is on the low-side for consumer retailing stocks.
What this means for you:
Are you a shareholder? Whilst there are few things you may like about Andersons from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. It may be worth exploring other income stocks as alternatives to Andersons or even look at high-growth stocks to supplement your steady income stocks. I recommend continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking all the above into account, Andersons 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. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Check our latest free fundmental analysis to explore other aspects of Andersons.
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.