On the 30 March 2018, Rocky Mountain Dealerships Inc (TSX:RME) will be paying shareholders an upcoming dividend amount of CA$0.12 per share. However, investors must have bought the company’s stock before 27 February 2018 in order to qualify for the payment. That means you have only 3 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Rocky Mountain Dealerships’s latest financial data to analyse its dividend characteristics. See our latest analysis for Rocky Mountain Dealerships
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically: Its annual yield is among the top 25% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its dividend per share amount has increased over the past It is able to pay the current rate of dividends from its earnings It is able to continue to payout at the current rate in the future
High Yield And Dependable
Rocky Mountain Dealerships currently yields 3.64%, which is high for Trade Distributors stocks. But the real reason Rocky Mountain Dealerships stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of RME it has increased its DPS from CA$0.18 to CA$0.46 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes RME a true dividend rockstar. Rocky Mountain Dealerships has a trailing twelve-month payout ratio of 45.92%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 30.57%, leading to a dividend yield of 3.64%. However, EPS should increase to CA$1.29, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
Rocky Mountain Dealerships’s strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given 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. I’ve put together three pertinent aspects you should further research:
- 1. Future Outlook: What are well-informed industry analysts predicting for RME’s future growth? Take a look at our free research report of analyst consensus for RME’s outlook.
- 2. Valuation: What is RME 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 RME is currently mispriced by the market.
- 3. Other Dividend Rockstars: Are there strong dividend payers with better 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.