Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Joyce Corporation Ltd (ASX:JYC) has returned to shareholders over the past 10 years, an average dividend yield of 6.00% annually. Does Joyce tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View our latest analysis for Joyce

5 checks you should use to assess a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

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

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

• Has it increased its dividend per share amount over the past?

• Can it afford 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?

Does Joyce pass our checks?

The company currently pays out 64.88% of its earnings as a dividend, according to its trailing twelve-month data, 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 dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. 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. In terms of its peers, Joyce produces a yield of 7.99%, which is high for Specialty Retail stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Joyce as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 fundamental aspects you should further research:

• 1. Valuation: What is JYC 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 JYC is currently mispriced by the market.

• 2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Joyce’s board and the CEO’s back ground.

• 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.