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Attention dividend hunters! S&U plc (LSE:SUS) will be distributing its dividend of £0.32 per share on the 16 March 2018, and will start trading ex-dividend in 3 days time on the 22 February 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into S&U’s latest financial data to analyse its dividend attributes. See our latest analysis for S&U
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically: It is paying an annual yield above 75% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its dividend per share amount has increased over the past It can afford to pay the current rate of dividends from its earnings It is able to continue to payout at the current rate in the future
High Yield And Dependable
S&U’s yield sits at 4.34%, which is high for Consumer Finance stocks. But the real reason S&U stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of SUS it has increased its DPS from £0.32 to £0.99 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 SUS a true dividend rockstar. The current trailing twelve-month payout ratio for the stock is 50.66%, which means that the dividend is covered by earnings. Going forward, analysts expect SUS’s payout to remain around the same level at 49.98% of its earnings, which leads to a dividend yield of around 5.71%. Moreover, EPS should increase to £2.17.
Next Steps:
S&U’s strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given 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. I’ve put together three pertinent factors you should look at:
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1. Future Outlook: What are well-informed industry analysts predicting for SUS’s future growth? Take a look at our free research report of analyst consensus for SUS’s outlook.
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2. Valuation: What is SUS 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 SUS is currently mispriced by the market.
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3. Other Dividend Rockstars: Are there strong dividend payers with better 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.