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Read This Before Buying AutoCanada Inc (TSE:ACQ) For Its Upcoming $0.1 Dividend

Important news for shareholders and potential investors in AutoCanada Inc (TSX:ACQ): The dividend payment of CA$0.1 per share will be distributed into shareholder on 15 June 2018, and the stock will begin trading ex-dividend at an earlier date, 30 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into AutoCanada’s latest financial data to analyse its dividend attributes. View our latest analysis for AutoCanada

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:

  • Is it the top 25% annual dividend yield payer?

  • Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

  • Has dividend per share amount increased 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?

TSX:ACQ Historical Dividend Yield May 26th 18
TSX:ACQ Historical Dividend Yield May 26th 18

How well does AutoCanada fit our criteria?

The current trailing twelve-month payout ratio for the stock is 18.57%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from AutoCanada 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, AutoCanada has a yield of 2.38%, which is on the low-side for Specialty Retail stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in AutoCanada for the dividend. 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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three key aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for ACQ’s future growth? Take a look at our free research report of analyst consensus for ACQ’s outlook.

  2. Valuation: What is ACQ 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 ACQ is currently mispriced by the market.

  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.

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