Should Income Investors Buy Mineral Resources Limited (ASX:MIN) Before Its Ex-Dividend?

Investors who want to cash in on Mineral Resources Limited’s (ASX:MIN) upcoming dividend of AU$0.40 per share have only 2 days left to buy the shares before its ex-dividend date, 31 August 2018, in time for dividends payable on the 27 September 2018. Should you diversify into Mineral Resources 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 Mineral Resources

5 questions to ask before buying a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Does it pay an annual yield higher than 75% of dividend payers?

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

• Has the amount of dividend per share grown over the past?

• Is is able 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?

ASX:MIN Historical Dividend Yield August 28th 18

How does Mineral Resources fare?

The current trailing twelve-month payout ratio for the stock is 44.7%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 45.7%, leading to a dividend yield of 4.7%. In addition to this, EPS is forecasted to fall to A$1.33 in the upcoming year.

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. Although MIN’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time.

Compared to its peers, Mineral Resources has a yield of 4.0%, which is on the low-side for Metals and Mining stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Mineral Resources as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. Below, I’ve compiled three essential aspects you should look at:

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

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

3. 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.