Should Weng Fine Art AG (FRA:WFT) Be Part Of Your Income Portfolio?
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Historically, Weng Fine Art AG (FRA:WFT) has paid a dividend to shareholders. It currently yields 1.5%. Does Weng Fine Art tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.
Check out our latest analysis for Weng Fine Art
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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 dividend per share risen in the past couple of years?
Is its earnings sufficient to payout dividend at the current rate?
Will the company be able to keep paying dividend based on the future earnings growth?
How does Weng Fine Art fare?
The current payout ratio for WFT is negative, which is not great.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Weng Fine Art as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, Weng Fine Art has a yield of 1.5%, which is on the low-side for Consumer Services stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Weng Fine Art 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, 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 pertinent factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for WFT’s future growth? Take a look at our free research report of analyst consensus for WFT’s outlook.
Historical Performance: What has WFT’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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.
