Read This Before Buying Capilano Honey Limited (ASX:CZZ) For Its Upcoming AU$0.42 Dividend
Investors who want to cash in on Capilano Honey Limited’s (ASX:CZZ) upcoming dividend of AU$0.42 per share have only 2 days left to buy the shares before its ex-dividend date, 28 June 2018, in time for dividends payable on the 31 July 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Capilano Honey’s latest financial data to analyse its dividend characteristics. See our latest analysis for Capilano Honey
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is its annual yield among the top 25% of dividend-paying companies?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Is is able to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Capilano Honey fare?
Capilano Honey has a trailing twelve-month payout ratio of 43.74%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 38.93%, leading to a dividend yield of 2.78%. However, EPS should increase to A$1.07, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Capilano Honey as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, Capilano Honey has a yield of 2.53%, which is high for Food stocks but still below the market’s top dividend payers.
Next Steps:
If Capilano Honey is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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 important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for CZZ’s future growth? Take a look at our free research report of analyst consensus for CZZ’s outlook.
Valuation: What is CZZ 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 CZZ is currently mispriced by the market.
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.
