Read This Before Buying Reliance Steel & Aluminum Co (RS) For Its Upcoming $0.45 Dividend
If you are interested in cashing in on Reliance Steel & Aluminum Co’s (NYSE:RS) upcoming dividend of $0.45 per share, you only have 8 days left to buy the shares before its ex-dividend date, 16 November 2017, in time for dividends payable on the 08 December 2017. Is this future income a persuasive enough catalyst for investors to think about RS as an investment today? Below, 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 Reliance Steel & Aluminum
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 payers?
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?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Reliance Steel & Aluminum fit our criteria?
The current payout ratio for the stock is 34.58%, which means that the dividend is covered by earnings. Looking forward, analysts expect RS to pay out 28.79% of its earnings and dividends yield to be around 2.40%. Moreover, EPS should increase to $5.85. This means the company should be able to continue to payout dividends. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of RS it has increased its DPS from $0.32 to $1.8 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 RS a true dividend rockstar. In terms of its peers, RS generates a yield of 2.29%, which is on the low-side for metals and mining stocks.
What this means for you:
Are you a shareholder? With Reliance Steel & Aluminum producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. But, depending on your current holdings, it may be valuable exploring other dividend stocks to increase diversification, 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? Considering the dividend attributes we analyzed above, RS is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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. Whether or not you like RS as a dividend stock, it’s still worth checking the price tag. Is RS still a bargain? Check our latest free analysis to find out!
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.
