Yahoo Finance Virtus Health Limited (ASX:VRT): 3 Days To Buy Before The Ex-Dividend Date
Shares of Virtus Health Limited (ASX:VRT) will begin trading ex-dividend in 3 days. To qualify for the dividend check of AU$0.12 per share, investors must have owned the shares prior to 13 September 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Is this future income a persuasive enough catalyst for investors to think about Virtus Health as an investment today? Below, 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 Virtus Health
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
How well does Virtus Health fit our criteria?
The company currently pays out 68.0% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect VRT’s payout to remain around the same level at 68.3% of its earnings, which leads to a dividend yield of around 5.4%. Furthermore, EPS should increase to A$0.42.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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. Unfortunately, it is really too early to view Virtus Health as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Virtus Health produces a yield of 4.6%, which is high for Healthcare stocks but still below the market’s top dividend payers.
Next Steps:
Taking all the above into account, Virtus Health is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. There are three important aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for VRT’s future growth? Take a look at our free research report of analyst consensus for VRT’s outlook.
Valuation: What is VRT 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 VRT 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 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.
