Yahoo Finance Is Noni B Limited (ASX:NBL) An Attractive Dividend Stock?
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A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Historically, Noni B Limited (ASX:NBL) has paid a dividend to shareholders. It currently yields 4.6%. Should it have a place in your portfolio? Let's take a look at Noni B in more detail.
Check out our latest analysis for Noni B
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is their annual yield among the top 25% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share risen in the past couple of years?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Noni B pass our checks?
Noni B has a trailing twelve-month payout ratio of 78%, which means that the dividend is covered by earnings. Going forward, analysts expect NBL's payout to remain around the same level at 79% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 9.2%. Moreover, EPS should increase to A$0.26.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
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. Although NBL'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, Noni B has a yield of 4.6%, which is on the low-side for Specialty Retail stocks.
Next Steps:
Taking into account the dividend metrics, Noni B 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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I've put together three important factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for NBL’s future growth? Take a look at our free research report of analyst consensus for NBL’s outlook.
Valuation: What is NBL 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 NBL 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
