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Shares of Crest Nicholson Holdings plc (LON:CRST) will begin trading ex-dividend in 2 days. To qualify for the dividend check of UK£0.11 per share, investors must have owned the shares prior to 20 September 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Is this future income a persuasive enough catalyst for investors to think about Crest Nicholson Holdings as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.

View our latest analysis for Crest Nicholson Holdings

Here’s how I find good dividend stocks

If you are a dividend investor, you should always assess these five key metrics:

• Is it paying an annual yield above 75% of dividend payers?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share risen in the past couple of years?

• Is is able to pay the current rate of dividends from its earnings?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

How does Crest Nicholson Holdings fare?

Crest Nicholson Holdings has a trailing twelve-month payout ratio of 50.4%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect CRST’s payout to remain around the same level at 50.6% of its earnings, which leads to a dividend yield of 9.7%. Furthermore, EPS should increase to £0.68.

When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

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 Crest Nicholson Holdings 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, Crest Nicholson Holdings generates a yield of 9.0%, which is high for Consumer Durables stocks.

Next Steps:

With this in mind, I definitely rank Crest Nicholson Holdings 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, 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. There are three important aspects you should further research: