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Shares of Platinum Investment Management Limited (ASX:PTM) will begin trading ex-dividend in 2 days. To qualify for the dividend check of A$0.16 per share, investors must have owned the shares prior to 01 March 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 examine Platinum Investment Management’s latest financial data to analyse its dividend characteristics. View our latest analysis for Platinum Investment Management
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is its annual yield among the top 25% of dividend-paying companies?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has it increased its dividend per share amount over the past?
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Does earnings amply cover its dividend payments?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Platinum Investment Management fit our criteria?
The company currently pays out 91.07% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a payout ratio of 94.96%, leading to a dividend yield of 4.86%. Moreover, EPS should increase to A$0.35. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, Platinum Investment Management has a yield of 4.49%, which is high for Capital Markets stocks but still below the market’s top dividend payers.
Next Steps:
After digging a little deeper into Platinum Investment Management’s yield, it’s easy to see why you should be cautious investing in the company just 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 factors you should look at: