Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. In the past 10 years Advanced Share Registry Limited (ASX:ASW) has returned an average of 6.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Advanced Share Registry in more detail. View our latest analysis for Advanced Share Registry
5 questions I ask before picking a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
-
Is it paying an annual yield above 75% of dividend payers?
-
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
-
Has dividend per share amount increased over the past?
-
Is it able to pay the current rate of dividends from its earnings?
-
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Advanced Share Registry fit our criteria?
The current trailing twelve-month payout ratio for ASW is 100.91%, meaning the dividend is not sufficiently covered by its 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 ASW it has increased its DPS from A$0.02 to A$0.04 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 ASW a true dividend rockstar. Compared to its peers, Advanced Share Registry produces a yield of 5.25%, which is high for Capital Markets stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Advanced Share Registry is definitely worth considering for investors looking to build a dedicated income portfolio. 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. I’ve put together three key factors you should further examine:
-
1. Valuation: What is ASW 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 ASW 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 Advanced Share Registry’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.