Have you been keeping an eye on Power Financial Corporation’s (TSX:PWF) upcoming dividend of CA$0.43 per share payable on the 01 May 2018? Then you only have 6 days left before the stock starts trading ex-dividend on the 06 April 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Power Financial can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for Power Financial
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically: Its annual yield is among the top 25% of dividend payers It has paid dividend every year without dramatically reducing payout in the past Its has increased its dividend per share amount over the past It is able 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
The company’s dividend yield stands at 5.37%, which is high for Insurance stocks. But the real reason Power Financial stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of PWF it has increased its DPS from CA$1.25 to CA$1.73 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 PWF a true dividend rockstar. Power Financial has a trailing twelve-month payout ratio of 68.56%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 48.94%, leading to a dividend yield of 5.40%. However, EPS should increase to CA$3.24, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
Next Steps:
There aren’t many other stocks out there with the same track record as Power Financial, so I would certainly recommend further examining the stock if its dividend characteristics appeal to you. 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. Below, I’ve compiled three essential aspects you should further research: