Yahoo Finance Is Buying Baby Bunting Group Limited (ASX:BBN) For Its Upcoming AU$0.025 Dividend A Good Choice?
Have you been keeping an eye on Baby Bunting Group Limited’s (ASX:BBN) upcoming dividend of AU$0.025 per share payable on the 14 September 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 23 August 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Baby Bunting Group can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
See our latest analysis for Baby Bunting Group
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it paying an annual yield above 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has it increased its dividend per share amount over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Baby Bunting Group fit our criteria?
The company currently pays out 76.87% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect BBN’s payout to remain around the same level at 71.25% of its earnings, which leads to a dividend yield of around 4.22%. Moreover, EPS should increase to A$0.10.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Baby Bunting Group as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, Baby Bunting Group produces a yield of 2.24%, which is on the low-side for Specialty Retail stocks.
Next Steps:
If you are building an income portfolio, then Baby Bunting Group is a complicated choice since it has some positive aspects as well as negative ones. 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. I’ve put together three essential factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for BBN’s future growth? Take a look at our free research report of analyst consensus for BBN’s outlook.
Valuation: What is BBN 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 BBN 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.