James Hardie Industries plc (ASX:JHX): Dividend Is Coming In 3 Days, Should You Buy?
Important news for shareholders and potential investors in James Hardie Industries plc (ASX:JHX): The dividend payment of $0.3 per share will be distributed into shareholder on 03 August 2018, and the stock will begin trading ex-dividend at an earlier date, 06 June 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding James Hardie Industries can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for James Hardie Industries
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Is their annual yield among the top 25% 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?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does James Hardie Industries fare?
James Hardie Industries has a trailing twelve-month payout ratio of 120.79%, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 61.36%, leading to a dividend yield of 3.22%. Furthermore, EPS should increase to $0.67, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. 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. Compared to its peers, James Hardie Industries generates a yield of 2.38%, which is on the low-side for Basic Materials stocks.
Next Steps:
After digging a little deeper into James Hardie Industries’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. 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. Below, I’ve compiled three fundamental factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for JHX’s future growth? Take a look at our free research report of analyst consensus for JHX’s outlook.
Valuation: What is JHX 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 JHX 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 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.