Have you been keeping an eye on CF Industries Holdings Inc’s (NYSE:CF) upcoming dividend of $0.3 per share payable on the 31 May 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 14 May 2018. Should you diversify into CF Industries Holdings 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. View our latest analysis for CF Industries Holdings
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:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share risen in the past couple of years?
- Is it 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 CF Industries Holdings fare?
CF Industries Holdings has a trailing twelve-month payout ratio of 63.16%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect CF’s payout to fall to 44.56% of its earnings, which leads to a dividend yield of 3.12%. Moreover, EPS is also forecasted to fall to $1.09 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment 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. In the case of CF it has increased its DPS from $0.08 to $1.2 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes CF a true dividend rockstar. Compared to its peers, CF Industries Holdings has a yield of 3.10%, which is high for Chemicals stocks but still below the market’s top dividend payers.
With these dividend metrics in mind, I definitely rank CF Industries Holdings as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CF’s future growth? Take a look at our free research report of analyst consensus for CF’s outlook.
- Valuation: What is CF 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 CF is currently mispriced by the market.
- Other 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.