3 Days Left Before Bharat Petroleum Corporation Limited (NSE:BPCL) Will Start Trading Ex-Dividend, Should Investors Buy?
In This Article:
Important news for shareholders and potential investors in Bharat Petroleum Corporation Limited (NSEI:BPCL): The dividend payment of ₹14 per share will be distributed into shareholder on 09 March 2018, and the stock will begin trading ex-dividend at an earlier date, 22 February 2018. Is this future income a persuasive enough catalyst for investors to think about Bharat Petroleum 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. Check out our latest analysis for Bharat Petroleum
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is it paying an annual yield above 75% of dividend payers?
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Does it consistently pay out dividends without missing a payment or significantly cutting payout?
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Has dividend per share amount increased over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will the company be able to keep paying dividend based on the future earnings growth?
Does Bharat Petroleum pass our checks?
Bharat Petroleum has a trailing twelve-month payout ratio of 24.81%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 40.44%, leading to a dividend yield of around 4.17%. However, EPS is forecasted to fall to ₹40.55 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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. Although BPCL’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Compared to its peers, Bharat Petroleum generates a yield of 3.22%, which is high for Oil and Gas stocks.
Next Steps:
With this in mind, I definitely rank Bharat Petroleum as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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. There are three important factors you should further research:
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1. Future Outlook: What are well-informed industry analysts predicting for BPCL’s future growth? Take a look at our free research report of analyst consensus for BPCL’s outlook.
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2. Valuation: What is BPCL 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 BPCL is currently mispriced by the market.
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3. 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 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.