S&U plc (LON:SUS) Will Pay UK£0.32 In Dividends
If you are interested in cashing in on S&U plc’s (LON:SUS) upcoming dividend of UK£0.32 per share, you only have 4 days left to buy the shares before its ex-dividend date, 25 October 2018, in time for dividends payable on the 16 November 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding S&U can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
View our latest analysis for S&U
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 it the top 25% annual dividend yield payer?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Is its earnings sufficient to payout dividend at the current rate?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does S&U pass our checks?
The company currently pays out 49% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 50%, leading to a dividend yield of around 6.8%. Furthermore, EPS should increase to £2.56.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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 SUS it has increased its DPS from £0.32 to £1.05 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 SUS a true dividend rockstar.
In terms of its peers, S&U produces a yield of 5.0%, which is on the low-side for Consumer Finance stocks.
Next Steps:
Keeping in mind the dividend characteristics above, S&U is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three fundamental aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for SUS’s future growth? Take a look at our free research report of analyst consensus for SUS’s outlook.
Valuation: What is SUS 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 SUS 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
