Is Staffline Group plc (LON:STAF) An Attractive Dividend Stock?
Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. In the past 10 years Staffline Group plc (AIM:STAF) has returned an average of 4.00% per year to investors in the form of dividend payouts. Does Staffline Group tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. Check out our latest analysis for Staffline Group
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key 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 it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
How does Staffline Group fare?
Staffline Group has a trailing twelve-month payout ratio of 37.38%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 24.81%, leading to a dividend yield of 3.21%. However, EPS should increase to £1.04, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, Staffline Group produces a yield of 2.78%, which is high for Professional Services stocks but still below the market’s top dividend payers.
Next Steps:
With this in mind, I definitely rank Staffline Group 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, 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 look at:
1. Future Outlook: What are well-informed industry analysts predicting for STAF’s future growth? Take a look at our free research report of analyst consensus for STAF’s outlook.
2. Valuation: What is STAF 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 STAF is currently mispriced by the market.
3. 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.
