Investors who want to cash in on Royal Caribbean Cruises Ltd’s (NYSE:RCL) upcoming dividend of $0.6 per share have only 3 days left to buy the shares before its ex-dividend date, 20 December 2017, in time for dividends payable on the 05 January 2018. Should you diversify into Royal Caribbean Cruises 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 Royal Caribbean Cruises
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:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Does earnings amply cover its dividend payments?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Royal Caribbean Cruises fare?
The company currently pays out 27.42% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect RCL’s payout to remain around the same level at 29.14% of its earnings, which leads to a dividend yield of 1.98%. Moreover, EPS should increase to $8.32. 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. Although RCL’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, Royal Caribbean Cruises produces a yield of 1.92%, which is on the low-side for hospitality stocks.
What this means for you:
Are you a shareholder? Whilst there are few things you may like about Royal Caribbean Cruises from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. It may be worth exploring other income stocks as alternatives to Royal Caribbean Cruises or even look at high-growth stocks to complement 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? Taking all the above into account, Royal Caribbean Cruises is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Take a look at our latest free fundmental analysis to explore other aspects of Royal Caribbean Cruises.
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.