Attention dividend hunters! Capitol Federal Financial Inc (NASDAQ:CFFN) will be distributing its dividend of $0.09 per share in 3 days time, on the 17 November 2017, and will start trading ex-dividend on the 02 November 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into CFFN’s latest financial data to analyse its dividend attributes. View our latest analysis for Capitol Federal Financial
Here’s how I find good dividend stocks
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How well does Capitol Federal Financial fit our criteria?
The company currently pays out 54.18% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. Looking forward, analysts expect CFFN to pay out 126.03% of its earnings and dividends yield to be around 6.21%. Furthermore, EPS should increase to $0.67. This means shareholders should be concerned with the company’s ability to continue paying. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Not only have dividend payouts from Capitol Federal Financial fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. Relative to peers, CFFN has a yield of 6.09%, which is high for thrifts and mortgage finance stocks.
What this means for you:
Are you a shareholder? If CFFN is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be beneficial exploring other dividend stocks as alternatives to CFFN or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by exploring 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, Capitol Federal Financial is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, CFFN could still offer some interesting investment opportunities. As with all investments, 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. Dig deeping in our latest free fundmental analysis to explore other aspects of CFFN.
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.