Yahoo Finance Only 2 Days Left Before Ramsay Health Care Limited (ASX:RHC) Will Start Trading Ex-Dividend, Should You Buy?
Important news for shareholders and potential investors in Ramsay Health Care Limited (ASX:RHC): The dividend payment of AU$0.86 per share will be distributed into shareholder on 28 September 2018, and the stock will begin trading ex-dividend at an earlier date, 05 September 2018. Should you diversify into Ramsay Health Care 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.
View our latest analysis for Ramsay Health Care
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Is it the top 25% annual dividend yield payer?
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?
Can it afford to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Ramsay Health Care fare?
The company currently pays out 77.1% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 52.5%, leading to a dividend yield of 2.9%. However, EPS should increase to A$2.84, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
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. In the case of RHC it has increased its DPS from A$0.33 to A$1.44 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes RHC a true dividend rockstar.
In terms of its peers, Ramsay Health Care produces a yield of 2.6%, which is on the low-side for Healthcare stocks.
Next Steps:
Taking into account the dividend metrics, Ramsay Health Care 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. Below, I’ve compiled three pertinent factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for RHC’s future growth? Take a look at our free research report of analyst consensus for RHC’s outlook.
Valuation: What is RHC 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 RHC 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.
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.
