Is Fiducian Group Limited (ASX:FID) A Smart Choice For Dividend Investors?

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Fiducian Group Limited (ASX:FID) has returned to shareholders over the past 10 years, an average dividend yield of 5.00% annually. Let’s dig deeper into whether Fiducian Group should have a place in your portfolio. View out our latest analysis for Fiducian Group

5 questions to ask before buying a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is its annual yield among the top 25% of dividend-paying companies?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has dividend per share amount increased over the past?

• Does earnings amply cover its dividend payments?

• Will it be able to continue to payout at the current rate in the future?

ASX:FID Historical Dividend Yield June 23rd 18

How well does Fiducian Group fit our criteria?

Fiducian Group has a trailing twelve-month payout ratio of 66.53%, 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.

Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

Relative to peers, Fiducian Group has a yield of 3.77%, which is on the low-side for Capital Markets stocks.

Next Steps:

If Fiducian Group is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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, 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 essential aspects you should further examine:

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

2. Historical Performance: What has FID’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

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.