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A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. The Jean Coutu Group (PJC) Inc (TSX:PJC.A) has returned to shareholders over the past 10 years, an average dividend yield of 2.00% annually. Should it have a place in your portfolio? Let’s take a look at Jean Coutu Group (PJC) in more detail. View our latest analysis for Jean Coutu Group (PJC)
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is it paying an annual yield above 75% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has dividend per share amount increased over the past?
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Does earnings amply cover its dividend payments?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does Jean Coutu Group (PJC) fit our criteria?
The current trailing twelve-month payout ratio for the stock is 51.13%, 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. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of PJC.A it has increased its DPS from CA$0.16 to CA$0.52 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 PJC.A a true dividend rockstar. Compared to its peers, Jean Coutu Group (PJC) produces a yield of 2.12%, which is high for Consumer Retailing stocks but still below the market’s top dividend payers.
Next Steps:
With this in mind, I definitely rank Jean Coutu Group (PJC) 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, 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. There are three key aspects you should further research:
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Future Outlook: What are well-informed industry analysts predicting for PJC.A’s future growth? Take a look at our free research report of analyst consensus for PJC.A’s outlook.
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Valuation: What is PJC.A 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 PJC.A is currently mispriced by the market.
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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.