Wagners Holding Company Limited (ASX:WGN): What You Have To Know Before Buying For The Upcoming Dividend
Attention dividend hunters! Wagners Holding Company Limited (ASX:WGN) will be distributing its dividend of AU$0.035 per share on the 16 October 2018, and will start trading ex-dividend in 2 days time on the 28 August 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Wagners Holding’s latest financial data to analyse its dividend attributes.
Check out our latest analysis for Wagners Holding
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it paying an annual yield above 75% 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 its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
Does Wagners Holding pass our checks?
The current trailing twelve-month payout ratio for the stock is 29.3%, which means that the dividend is covered by earnings. Going forward, analysts expect WGN’s payout to increase to 60.0% of its earnings, which leads to a dividend yield of 2.4%. However, EPS is forecasted to fall to A$0.17 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Wagners Holding 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.
Compared to its peers, Wagners Holding produces a yield of 1.6%, which is on the low-side for Basic Materials stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Wagners Holding for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering 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. I’ve put together three fundamental aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for WGN’s future growth? Take a look at our free research report of analyst consensus for WGN’s outlook.
Valuation: What is WGN 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 WGN is currently mispriced by the market.
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.
