Is Van Elle Holdings plc (LON:VANL) An Attractive Dividend Stock?
Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. In the past, Van Elle Holdings plc (AIM:VANL) has returned an average of 3.00% per year to investors in the form of dividend payouts. Does Van Elle Holdings tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View our latest analysis for Van Elle Holdings
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Does it pay an annual yield higher than 75% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has the amount of dividend per share grown over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
Does Van Elle Holdings pass our checks?
The current payout ratio for the stock is 26.56%, which means that the dividend is covered by earnings. Going forward, analysts expect VANL’s payout to increase to 32.85% of its earnings, which leads to a dividend yield of 4.59%. Moreover, EPS should increase to £0.11. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Unfortunately, it is really too early to view Van Elle Holdings as a dividend investment. Last year was the company’s first dividend payment, so it is certainly early days. The standard practice for reliable payers is to look for 10 or so years of track record. Relative to peers, Van Elle Holdings has a yield of 2.94%, which is high for construction stocks but still below the market’s top dividend payers.
Next Steps:
Taking all the above into account, Van Elle Holdings is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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 fundamental aspects you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for VANL’s future growth? Take a look at our free research report of analyst consensus for VANL’s outlook.
2. Valuation: What is VANL 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 VANL is currently mispriced by the market.
3. 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.
