What To Know Before Buying Integrated Research Limited (ASX:IRI) For Its Dividend

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Over the past 10 years, Integrated Research Limited (ASX:IRI) has returned an average of 6.00% per year to shareholders in terms of dividend yield. Let’s dig deeper into whether Integrated Research should have a place in your portfolio. See our latest analysis for Integrated Research

5 checks you should do on a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

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

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share risen in the past couple of years?

• Is it able to pay the current rate of dividends from its earnings?

• Will the company be able to keep paying dividend based on the future earnings growth?

ASX:IRI Historical Dividend Yield Jun 11th 18

How well does Integrated Research fit our criteria?

The company currently pays out 55.38% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 58.29%, leading to a dividend yield of around 2.64%. Moreover, EPS should increase to A$0.12. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Although IRI’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, Integrated Research generates a yield of 2.10%, which is high for Software stocks but still below the low risk savings rate.

Next Steps:

If you are building an income portfolio, then Integrated Research is a complicated choice since it has some positive aspects as well as negative ones. 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, 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 fundamental aspects you should further research:

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

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

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.