Shares of Nordic American Offshore Ltd (NYSE:NAO) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.02 per share, investors must have owned the shares prior to 22 February 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Nordic American Offshore’s latest financial data to analyse its dividend attributes. View our latest analysis for Nordic American Offshore
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is their annual yield among the top 25% of dividend payers?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has dividend per share amount increased over the past?
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Is is able to pay the current rate of dividends from its earnings?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does Nordic American Offshore fit our criteria?
Nordic American Offshore has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Nordic American Offshore as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Nordic American Offshore has a yield of 6.67%, which is high for Energy Services stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Nordic American Offshore for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 important aspects you should look at:
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1. Future Outlook: What are well-informed industry analysts predicting for NAO’s future growth? Take a look at our free research report of analyst consensus for NAO’s outlook.
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2. Historical Performance: What has NAO’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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3. 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.