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Important news for shareholders and potential investors in Eildon Capital Limited (ASX:EDC): The dividend payment of A$0.02 per share will be distributed into shareholder on 24 April 2018, and the stock will begin trading ex-dividend at an earlier date, 03 April 2018. 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 Eildon Capital’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Eildon Capital
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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Is their annual yield among the top 25% of dividend payers?
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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 dividend per share risen in the past couple of years?
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Is its earnings sufficient to payout dividend at the current rate?
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Will it have the ability to keep paying its dividends going forward?
Does Eildon Capital pass our checks?
Eildon Capital has a trailing twelve-month payout ratio of 84.18%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. 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 Eildon Capital as a dividend investment. Last year was the company’s first dividend payment, so it is certainly early days. The standard practice for reliable payers is to look for 10 or so years of track record. In terms of its peers, Eildon Capital generates a yield of 7.50%, which is high for Capital Markets stocks.
Next Steps:
Taking all the above into account, Eildon Capital 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, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three fundamental aspects you should further research: