Why Britvic plc (LON:BVIC) Is A Dividend Rockstar
There is a lot to be liked about Britvic plc (LSE:BVIC) as an income stock, over the past 10 years it has returned an average of 4.00% per year. The stock currently pays out a dividend yield of 3.93%, and has a market cap of UK£1.86B. Let’s dig deeper into whether Britvic should have a place in your portfolio. See our latest analysis for Britvic
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?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share amount increased over the past?
Is it able to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How does Britvic fare?
The company currently pays out 62.45% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect BVIC’s payout to fall to 50.14% of its earnings, which leads to a dividend yield of around 4.27%. However, EPS should increase to £0.46, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. BVIC has increased its DPS from £0.11 to £0.27 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Relative to peers, Britvic has a yield of 3.93%, which is high for Beverage stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, Britvic ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three fundamental factors you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for BVIC’s future growth? Take a look at our free research report of analyst consensus for BVIC’s outlook.
2. Valuation: What is BVIC 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 BVIC 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.
