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If you are interested in cashing in on CTI Logistics Limited’s (ASX:CLX) upcoming dividend of AU$0.02 per share, you only have 4 days left to buy the shares before its ex-dividend date, 30 October 2018, in time for dividends payable on the 14 November 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding CTI Logistics can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.

View our latest analysis for CTI Logistics

How I analyze a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• 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 it increased its dividend per share amount over the past?

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

• Will it be able to continue to payout at the current rate in the future?

How does CTI Logistics fare?

The company currently pays out 72% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect CLX’s payout to fall to 44% of its earnings, which leads to a dividend yield of around 4.1%.

If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

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 CLX it has increased its DPS from A$0.035 to A$0.040 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 CLX a true dividend rockstar.

Compared to its peers, CTI Logistics has a yield of 4.0%, which is high for Logistics stocks but still below the market’s top dividend payers.

Next Steps:

Keeping in mind the dividend characteristics above, CTI Logistics is definitely worth considering for investors looking to build a dedicated income portfolio. 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. Below, I’ve compiled three important aspects you should further examine: