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Attention dividend hunters! Exelon Corporation (NYSE:EXC) will be distributing its dividend of $0.35 per share on the 09 March 2018, and will start trading ex-dividend in 3 days time on the 14 February 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Exelon’s latest financial data to analyse its dividend attributes. View our latest analysis for Exelon
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
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Is its annual yield among the top 25% of dividend-paying companies?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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Has the amount of dividend per share grown over the past?
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Does earnings amply cover its dividend payments?
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Will it be able to continue to payout at the current rate in the future?
Does Exelon pass our checks?
The current trailing twelve-month payout ratio for the stock is 32.91%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect EXC’s payout to increase to 50.10% of its earnings, which leads to a dividend yield of 3.83%. However, EPS is forecasted to fall to $3.02 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from Exelon have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, Exelon has a yield of 3.74%, which is on the low-side for Electric Utilities stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Exelon as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 essential aspects you should look at:
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1. Future Outlook: What are well-informed industry analysts predicting for EXC’s future growth? Take a look at our free research report of analyst consensus for EXC’s outlook.
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2. Valuation: What is EXC 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 EXC 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.