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A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Historically, Exel Industries Société Anonyme (EPA:EXE) has paid a dividend to shareholders. It currently yields 2.4%. Should it have a place in your portfolio? Let’s take a look at Exel Industries Société Anonyme in more detail.
View our latest analysis for Exel Industries Société Anonyme
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 consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has the amount of dividend per share grown 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 Exel Industries Société Anonyme fare?
The company currently pays out 26% 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 EXE’s payout to remain around the same level at 24% of its earnings, which leads to a dividend yield of around 2.5%. Moreover, EPS should increase to €6.32.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although EXE’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Exel Industries Société Anonyme has a yield of 2.4%, which is high for Machinery stocks but still below the market’s top dividend payers.
Next Steps:
Keeping in mind the dividend characteristics above, Exel Industries Société Anonyme is definitely worth considering for investors looking to build a dedicated income portfolio. 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. I’ve put together three pertinent factors you should further examine: