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American Railcar Industries Inc (NASDAQ:ARII): Dividend Is Coming In 3 Days, Should You Buy?

Shares of American Railcar Industries Inc (NASDAQ:ARII) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.4 per share, investors must have owned the shares prior to 12 June 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. What does this mean for current shareholders and potential investors? Below, I will explain how holding American Railcar Industries can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for American Railcar Industries

How I analyze a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

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  • Is their annual yield among the top 25% of dividend payers?

  • Does it consistently pay out dividends without missing a payment of significantly cutting payout?

  • Has dividend per share risen in the past couple of years?

  • Does earnings amply cover its dividend payments?

  • Will it have the ability to keep paying its dividends going forward?

NasdaqGS:ARII Historical Dividend Yield Jun 8th 18
NasdaqGS:ARII Historical Dividend Yield Jun 8th 18

Does American Railcar Industries pass our checks?

The current trailing twelve-month payout ratio for the stock is 21.12%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, American Railcar Industries has a yield of 3.92%, which is high for Machinery stocks but still below the market’s top dividend payers.

Next Steps:

If you are building an income portfolio, then American Railcar Industries is a complicated choice since it has some positive aspects as well as negative ones. 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, 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 essential aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for ARII’s future growth? Take a look at our free research report of analyst consensus for ARII’s outlook.

  2. Valuation: What is ARII 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 ARII is currently mispriced by the market.

  3. 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.