Have you been waiting for Castings PLC’s (LSE:CGS) upcoming dividend of £0.03 per share? Then you only have to wait 3 more days before the stock pays out on 02 January 2018, and starts trading ex-dividend on the 23 November 2017. So if you want to cash in on CGS’s dividend payment and are not yet a shareholder, you have only few days left! Today I am going to take a look at CGS’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for CGS
5 questions I ask before picking a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Does it pay an annual yield higher than 75% of dividend payers?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has it increased its dividend per share amount over the past?
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Can it afford 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 does Castings fare?
Castings has a payout ratio of 50.24%, which means that the dividend is covered by earnings. However, going forward, analysts expect CGS’s payout to fall to 44.73% of its earnings, which leads to a dividend yield of 3.31%. However, EPS should increase to £0.31, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of CGS it has increased its DPS from £0.1 to £0.14 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. In terms of its peers, Castings produces a yield of 3.10%, which is high for machinery stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? With Castings producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. But, depending on your portfolio composition, it may be valuable exploring other income stocks to increase diversification, or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.