Over the past 10 years Schnitzer Steel Industries Inc (NASDAQ:SCHN) has returned an average of 2.00% per year from dividend payouts. The company is currently worth US$913.16m, and now yields roughly 2.16%. Should it have a place in your portfolio? Let’s take a look at Schnitzer Steel Industries in more detail. View out our latest analysis for Schnitzer Steel Industries
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
Does Schnitzer Steel Industries pass our checks?
The current trailing twelve-month payout ratio for the stock is 22.02%, which means that the dividend is covered by earnings. Going forward, analysts expect SCHN’s payout to increase to 24.43% of its earnings, which leads to a dividend yield of 2.17%. In addition to this, EPS should increase to $3.81. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors 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 SCHN it has increased its DPS from $0.068 to $0.75 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
In terms of its peers, Schnitzer Steel Industries generates a yield of 2.16%, which is on the low-side for Metals and Mining stocks.
With this in mind, I definitely rank Schnitzer Steel Industries as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three fundamental factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for SCHN’s future growth? Take a look at our free research report of analyst consensus for SCHN’s outlook.
- Valuation: What is SCHN 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 SCHN 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.