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Investors who want to cash in on J Smart & Co. (Contractors) PLC’s (LSE:SMJ) upcoming dividend of £0.01 per share have only 3 days left to buy the shares before its ex-dividend date, 10 May 2018, in time for dividends payable on the 01 June 2018. Is this future income a persuasive enough catalyst for investors to think about J. Smart (Contractors) 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 J. Smart (Contractors)
5 checks you should use to assess 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 the amount of dividend per share grown over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will it have the ability to keep paying its dividends going forward?
How well does J. Smart (Contractors) fit our criteria?
The current trailing twelve-month payout ratio for the stock is 35.33%, which means that the dividend is covered by 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. 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. SMJ has increased its DPS from £0.03 to £0.03 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Compared to its peers, J. Smart (Contractors) has a yield of 2.81%, which is on the low-side for Construction stocks.
Next Steps:
With this in mind, I definitely rank J. Smart (Contractors) 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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three key aspects you should further examine:
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Historical Performance: What has SMJ’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on J. Smart (Contractors)’s board and the CEO’s back ground.
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Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.