If you are interested in cashing in on Wynn Resorts Limited’s (NASDAQ:WYNN) upcoming dividend of US$0.75 per share, you only have 2 days left to buy the shares before its ex-dividend date, 15 August 2018, in time for dividends payable on the 28 August 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Wynn Resorts can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it the top 25% annual dividend yield payer?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has the amount of dividend per share grown over the past?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does Wynn Resorts pass our checks?
The current trailing twelve-month payout ratio for the stock is 49.60%, which means that the dividend is covered by earnings. However, going forward, analysts expect WYNN’s payout to fall to 30.91% of its earnings, which leads to a dividend yield of 2.15%. However, EPS should increase to $5.88, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from Wynn Resorts have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
Relative to peers, Wynn Resorts generates a yield of 2.02%, which is on the low-side for Hospitality stocks.
If Wynn Resorts is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer 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. There are three key aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for WYNN’s future growth? Take a look at our free research report of analyst consensus for WYNN’s outlook.
- Valuation: What is WYNN 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 WYNN 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 firstname.lastname@example.org.