If you are interested in cashing in on The PAS Group Limited’s (ASX:PGR) upcoming dividend of A$0.02 per share, you only have 4 days left to buy the shares before its ex-dividend date, 15 March 2018, in time for dividends payable on the 06 April 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine PAS Group’s latest financial data to analyse its dividend characteristics. See our latest analysis for PAS Group

Here’s how I find good dividend stocks

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is its annual yield among the top 25% of dividend-paying companies?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share amount increased over the past?

• Is it able to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

How well does PAS Group fit our criteria?

The current trailing twelve-month payout ratio for the stock is 70.44%, which means that the dividend is covered by 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. Unfortunately, it is really too early to view PAS Group as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, PAS Group has a yield of 6.52%, which is high for Specialty Retail stocks.

Next Steps:

Whilst there are few things you may like about PAS Group from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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, 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 important factors you should further examine:

• Valuation: What is PGR 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 PGR is currently mispriced by the market.

• Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on PAS Group’s board and the CEO’s back ground.

• 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.