Yahoo Finance Computershare Limited (ASX:CPU): Dividend Is Coming In 2 Days, Should You Buy?
Important news for shareholders and potential investors in Computershare Limited (ASX:CPU): The dividend payment of US$0.21 per share will be distributed into shareholder on 17 September 2018, and the stock will begin trading ex-dividend at an earlier date, 21 August 2018. Should you diversify into Computershare and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
See our latest analysis for Computershare
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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 the amount of dividend per share grown over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
Does Computershare pass our checks?
Computershare has a trailing twelve-month payout ratio of 40.80%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 48.48%, leading to a dividend yield of around 2.67%. Furthermore, EPS should increase to $0.64. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of CPU it has increased its DPS from $0.22 to $0.42 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes CPU a true dividend rockstar.
Relative to peers, Computershare has a yield of 2.20%, which is high for IT stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, Computershare ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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. Below, I’ve compiled three pertinent factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for CPU’s future growth? Take a look at our free research report of analyst consensus for CPU’s outlook.
Valuation: What is CPU 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 CPU is currently mispriced by the market.
Other 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.
