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If you are interested in cashing in on Bonterra Energy Corp’s (TSX:BNE) upcoming dividend of CA$0.1 per share, you only have 3 days left to buy the shares before its ex-dividend date, 14 February 2018, in time for dividends payable on the 28 February 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Bonterra Energy can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for Bonterra Energy
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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Does it pay an annual yield higher than 75% of dividend payers?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has the amount of dividend per share grown over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will it have the ability to keep paying its dividends going forward?
Does Bonterra Energy pass our checks?
The current payout ratio for BNE is negative, which means that it is loss-making, and paying its dividend from its retained earnings. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality facing BNE investors is that whilst it has continued to pay shareholders dividend, there has not been any increase in the level of dividends paid in the past decade. However, income investors that value stability over growth may still find BNE appealing. Compared to its peers, Bonterra Energy produces a yield of 9.33%, which is high for Oil and Gas stocks.
Next Steps:
Taking all the above into account, Bonterra Energy is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. I’ve put together three relevant aspects you should further examine:
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1. Valuation: What is BNE 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 BNE is currently mispriced by the market.
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2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Bonterra Energy’s board and the CEO’s back ground.
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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.