Yahoo Finance 2 Days Left To Treasury Wine Estates Limited (ASX:TWE)’s Ex-Dividend Date, Is It Worth Buying?
Attention dividend hunters! Treasury Wine Estates Limited (ASX:TWE) will be distributing its dividend of AU$0.17 per share on the 05 October 2018, and will start trading ex-dividend in 2 days time on the 05 September 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Treasury Wine Estates’s most recent financial data to examine its dividend characteristics in more detail.
View our latest analysis for Treasury Wine Estates
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it paying an annual yield above 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has it increased its dividend per share amount over the past?
Is its earnings sufficient to payout dividend at the current rate?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Treasury Wine Estates fit our criteria?
The current trailing twelve-month payout ratio for the stock is 64.4%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect TWE’s payout to remain around the same level at 66.7% of its earnings, which leads to a dividend yield of around 2.6%. Moreover, EPS should increase to A$0.63.
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 Treasury Wine Estates as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Relative to peers, Treasury Wine Estates generates a yield of 1.7%, which is on the low-side for Beverage stocks.
Next Steps:
After digging a little deeper into Treasury Wine Estates’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. There are three fundamental factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for TWE’s future growth? Take a look at our free research report of analyst consensus for TWE’s outlook.
Valuation: What is TWE 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 TWE 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 editorial-team@simplywallst.com.
