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On the 25 May 2018, Central Asia Metals Plc (AIM:CAML) will be paying shareholders an upcoming dividend amount of $0.1 per share. However, investors must have bought the company’s stock before 26 April 2018 in order to qualify for the payment. That means you have only 3 days left! Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Central Asia Metals’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Central Asia Metals
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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Is their annual yield among the top 25% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has dividend per share risen in the past couple of years?
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Is it able to pay the current rate of dividends from its earnings?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Central Asia Metals fit our criteria?
The current trailing twelve-month payout ratio for the stock is 76.86%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect CAML’s payout to fall to 52.07% of its earnings, which leads to a dividend yield of around 5.45%. However, EPS should increase to $0.51, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Central Asia Metals 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. In terms of its peers, Central Asia Metals generates a yield of 5.25%, which is high for Metals and Mining stocks.
Next Steps:
With this in mind, I definitely rank Central Asia Metals 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 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 essential factors you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for CAML’s future growth? Take a look at our free research report of analyst consensus for CAML’s outlook.
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Valuation: What is CAML 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 CAML is currently mispriced by the market.
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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.