Why Huntsman Corporation (NYSE:HUN) Is A Top Dividend Stocks
There is a lot to be liked about Huntsman Corporation (NYSE:HUN) as an income stock, over the past 10 years it has returned an average of 3.00% per year. The stock currently pays out a dividend yield of 2.06%, and has a market cap of US$7.41B. Let’s dig deeper into whether Huntsman should have a place in your portfolio. Check out our latest analysis for Huntsman
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Huntsman pass our checks?
Huntsman has a trailing twelve-month payout ratio of 23.17%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect HUN’s payout to fall to 17.32% of its earnings, which leads to a dividend yield of around 1.86%. However, EPS should increase to $3.2, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. HUN has increased its DPS from $0.4 to $0.65 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. Compared to its peers, Huntsman generates a yield of 2.06%, which is on the low-side for Chemicals stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Huntsman is definitely worth considering for investors looking to build a dedicated income portfolio. 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. There are three important factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for HUN’s future growth? Take a look at our free research report of analyst consensus for HUN’s outlook.
Valuation: What is HUN 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 HUN 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 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.
