Investors who want to cash in on Quad/Graphics Inc’s (NYSE:QUAD) upcoming dividend of $0.3 per share have only 5 days left to buy the shares before its ex-dividend date, 16 March 2018, in time for dividends payable on the 30 March 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Quad/Graphics’s latest financial data to analyse its dividend attributes. Check out our latest analysis for Quad/Graphics

5 questions to ask before buying a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is their annual yield among the top 25% of dividend payers?

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

• Has the amount of dividend per share grown over the past?

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

• Will the company be able to keep paying dividend based on the future earnings growth?

How does Quad/Graphics fare?

Quad/Graphics has a trailing twelve-month payout ratio of 55.52%, 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. The reality is that it is too early to consider Quad/Graphics as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Quad/Graphics produces a yield of 4.63%, which is high for Commercial Services stocks.

Next Steps:

If you are building an income portfolio, then Quad/Graphics is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. Below, I’ve compiled three relevant aspects you should further examine:

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

• Valuation: What is QUAD 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 QUAD is currently mispriced by the market.

• 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.