Wincanton plc (LON:WIN): Ex-Dividend Is In 4 Days
Important news for shareholders and potential investors in Wincanton plc (LON:WIN): The dividend payment of UK£0.036 per share will be distributed to shareholders on 11 January 2019, and the stock will begin trading ex-dividend at an earlier date, 06 December 2018. Is this future income a persuasive enough catalyst for investors to think about Wincanton as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
View our latest analysis for Wincanton
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it paying an annual yield above 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 is able to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
How does Wincanton fare?
Wincanton has a trailing twelve-month payout ratio of 31%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect WIN’s payout to increase to 35% of its earnings, which leads to a dividend yield of 4.5%. However, EPS is forecasted to fall to £0.33 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When assessing the forecast sustainability of a dividend it is also worth considering 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’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. WIN investors will be well aware the dividend payments are lower today than they were 10 years ago, although the payments have at least been steady. However, income investors that value stability over growth may still find WIN appealing.
Relative to peers, Wincanton produces a yield of 3.9%, which is high for Logistics stocks but still below the market’s top dividend payers.
Next Steps:
Keeping in mind the dividend characteristics above, Wincanton is definitely worth considering for investors looking to build a dedicated income portfolio. 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. There are three fundamental aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for WIN’s future growth? Take a look at our free research report of analyst consensus for WIN’s outlook.
Valuation: What is WIN 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 WIN 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 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.
