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Important news for shareholders and potential investors in Briscoe Group Limited (NZSE:BGP): The dividend payment of NZ$0.094 per share will be distributed to shareholders on 11 October 2018, and the stock will begin trading ex-dividend at an earlier date, 03 October 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Briscoe Group’s latest financial data to analyse its dividend attributes.
View our latest analysis for Briscoe Group
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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Is it the top 25% annual dividend yield payer?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has dividend per share amount increased over the past?
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Is is able to pay the current rate of dividends from its earnings?
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Will it be able to continue to payout at the current rate in the future?
How does Briscoe Group fare?
The company currently pays out 69.3% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect BGP’s payout to remain around the same level at 70.2% of its earnings, which leads to a dividend yield of around 5.8%. Moreover, EPS should increase to NZ$0.29.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. 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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Relative to peers, Briscoe Group generates a yield of 5.4%, which is high for Specialty Retail stocks but still below the market’s top dividend payers.
Next Steps:
With these dividend metrics in mind, I definitely rank Briscoe Group 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 key aspects you should further examine: