There is a lot to be liked about Advanced Share Registry Limited (ASX:ASW) as an income stock. It has paid dividends over the past 10 years. The stock currently pays out a dividend yield of 5.8%, and has a market cap of AU$31m. Does Advanced Share Registry tick all the boxes of a great dividend stock? Below, I'll take you through my analysis.
See our latest analysis for Advanced Share Registry
Here's how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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Does it pay an annual yield higher than 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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Is its earnings sufficient to payout dividend at the current rate?
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Will the company be able to keep paying dividend based on the future earnings growth?
How does Advanced Share Registry fare?
The current trailing twelve-month payout ratio for the stock is 80%, 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.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
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. In the case of ASW it has increased its DPS from A$0.020 to A$0.040 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, Advanced Share Registry has a yield of 5.8%, which is high for Capital Markets stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Advanced Share Registry 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. There are three relevant aspects you should further research: