Yahoo Finance Brambles Limited (ASX:BXB): Dividend Is Coming In 4 Days, Should You Buy?
On the 11 October 2018, Brambles Limited (ASX:BXB) will be paying shareholders an upcoming dividend amount of US$0.14 per share. However, investors must have bought the company’s stock before 11 September 2018 in order to qualify for the payment. That means you have only 4 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Brambles’s latest financial data to analyse its dividend attributes.
Check out our latest analysis for Brambles
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is its annual yield among the top 25% of dividend-paying companies?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has the amount of dividend per share grown over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it be able to continue to payout at the current rate in the future?
Does Brambles pass our checks?
The current trailing twelve-month payout ratio for the stock is 44.1%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 52.6%, leading to a dividend yield of 3.0%. However, EPS is forecasted to fall to $0.41 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Brambles fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
Relative to peers, Brambles has a yield of 2.7%, which is on the low-side for Commercial Services stocks.
Next Steps:
Whilst there are few things you may like about Brambles from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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 recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three pertinent aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for BXB’s future growth? Take a look at our free research report of analyst consensus for BXB’s outlook.
Valuation: What is BXB 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 BXB 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.
