If you are interested in cashing in on Bellway plc’s (LSE:BWY) upcoming dividend of £0.85 per share, you only have 3 days left to buy the shares before its ex-dividend date, 30 November 2017, in time for dividends payable on the 10 January 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine BWY’s latest financial data to analyse its dividend characteristics. View our latest analysis for Bellway

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:

• Is it paying an annual yield above 75% of dividend payers?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share risen in the past couple of years?

• Is is able to pay the current rate of dividends from its earnings?

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

How does Bellway fare?

Bellway has a payout ratio of 32.92%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 34.45%, leading to a dividend yield of around 4.32%. Furthermore, EPS should increase to £4.16. 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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, BWY generates a yield of 3.51%, which is on the low-side for household durables stocks.

What this means for you:

Are you a shareholder?

Are you a shareholder? With Bellway producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. But, depending on your current holdings, it may be worth exploring other dividend stocks to increase diversification, or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? Taking into account the dividend metrics, Bellway ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. As with all investments, 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. Whether or not you like BWY as a dividend stock, it’s still worth checking the price tag. Is BWY still a bargain? Dig deeper in our latest free analysis to find out!

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.