Shares of Conzzeta AG (VTX:CON) will begin trading ex-dividend in 3 days. To qualify for the dividend check of CHF18.00 per share, investors must have owned the shares prior to 18 April 2019, which is the last day the company's management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Conzzeta's latest financial data to analyse its dividend attributes.
Check out our latest analysis for Conzzeta
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Is their annual yield among the top 25% 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 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 have the ability to keep paying its dividends going forward?
How does Conzzeta fare?
The current trailing twelve-month payout ratio for the stock is 39%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 35% which, assuming the share price stays the same, leads to a dividend yield of 2.4%. Furthermore, EPS should increase to CHF52.
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.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Although CON's per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time.
Relative to peers, Conzzeta produces a yield of 2.1%, which is on the low-side for Machinery stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Conzzeta 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, 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 relevant aspects you should look at: