Investors who want to cash in on ACC Limited’s (NSEI:ACC) upcoming dividend of ₹15 per share have only 3 days left to buy the shares before its ex-dividend date, 17 May 2018, in time for dividends payable on the 13 July 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at ACC’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for ACC

5 checks you should use to assess a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• Does it pay an annual yield higher than 75% of dividend payers?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has dividend per share amount increased over the past?

• Can it afford to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

Does ACC pass our checks?

The current trailing twelve-month payout ratio for the stock is 50.66%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 51.48%, leading to a dividend yield of around 2.26%. In addition to this, EPS should increase to ₹60.11. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although ACC’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. Relative to peers, ACC generates a yield of 1.77%, which is high for Basic Materials stocks.

Next Steps:

With this in mind, I definitely rank ACC 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. Below, I’ve compiled three relevant factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for ACC’s future growth? Take a look at our free research report of analyst consensus for ACC’s outlook.

2. Valuation: What is ACC 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 ACC is currently mispriced by the market.

3. 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.