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Investors who want to cash in on Henry Boot PLC’s (LSE:BOOT) upcoming dividend of £0.05 per share have only 3 days left to buy the shares before its ex-dividend date, 26 April 2018, in time for dividends payable on the 30 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Henry Boot’s latest financial data to analyse its dividend attributes. See our latest analysis for Henry Boot
5 checks you should use to assess 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 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 it 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 does Henry Boot fare?
Henry Boot has a trailing twelve-month payout ratio of 24.92%, which means that the dividend is covered by earnings. Going forward, analysts expect BOOT’s payout to increase to 37.39% of its earnings, which leads to a dividend yield of 3.14%. However, EPS is forecasted to fall to £0.27 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Although BOOT’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, Henry Boot has a yield of 2.76%, which is on the low-side for Consumer Durables stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Henry Boot is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three key factors you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for BOOT’s future growth? Take a look at our free research report of analyst consensus for BOOT’s outlook.
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Valuation: What is BOOT 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 BOOT is currently mispriced by the market.
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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.