If you are interested in cashing in on NCC Group plc’s (LSE:NCC) upcoming dividend of £0.02 per share, you only have 3 days left to buy the shares before its ex-dividend date, 25 January 2018, in time for dividends payable on the 23 February 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into NCC Group’s latest financial data to analyse its dividend attributes. See our latest analysis for NCC Group
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 it the top 25% annual dividend yield payer?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has dividend per share amount increased over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does NCC Group fit our criteria?
NCC Group has a negative payout ratio, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. 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. In the case of NCC it has increased its DPS from £0.01 to £0.05 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes NCC a true dividend rockstar. Compared to its peers, NCC Group generates a yield of 2.32%, which is high for it stocks but still below the market’s top dividend payers.
Next Steps:
Keeping in mind the dividend characteristics above, NCC Group is definitely worth considering for investors looking to build a dedicated income 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. Below, I’ve compiled three important aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for NCC’s future growth? Take a look at our free research report of analyst consensus for NCC’s outlook.
2. Valuation: What is NCC worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether NCC is currently mispriced by the market.