On the 06 March 2018, Duty Free International Limited (SGX:5SO) will be paying shareholders an upcoming dividend amount of MYR0.01 per share. However, investors must have bought the company’s stock before 06 February 2018 in order to qualify for the payment. That means you have only 6 days left! Is this future income a persuasive enough catalyst for investors to think about Duty Free International 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. See our latest analysis for Duty Free International
5 questions I ask before picking 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 its annual yield among the top 25% of dividend-paying companies?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has dividend per share amount increased over the past?
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Can it afford 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?
Does Duty Free International pass our checks?
The current trailing twelve-month payout ratio for 5SO is 139.37%, which means that the dividend is not well-covered by its 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 there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Duty Free International as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Duty Free International produces a yield of 6.73%, which is high for Specialty Retail stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Duty Free International for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. Below, I’ve compiled three pertinent factors you should look at: