Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Tassal Group Limited (ASX:TGR) has returned to shareholders over the past 10 years, an average dividend yield of 4.00% annually. Let’s dig deeper into whether Tassal Group should have a place in your portfolio. Check out our latest analysis for Tassal Group
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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Is their annual yield among the top 25% of dividend payers?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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Has it increased its dividend per share amount over the past?
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Can it afford to pay the current rate of dividends from its earnings?
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Will the company be able to keep paying dividend based on the future earnings growth?
Does Tassal Group pass our checks?
The company currently pays out 44.09% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect TGR’s payout to increase to 51.15% of its earnings, which leads to a dividend yield of around 4.68%. However, EPS is forecasted to fall to A$0.33 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Although TGR’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. In terms of its peers, Tassal Group produces a yield of 4.22%, which is high for Food stocks but still below the market’s top dividend payers.
Next Steps:
Considering the dividend attributes we analyzed above, Tassal Group is definitely worth keeping an eye on for someone 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. I’ve put together three essential factors you should further research:
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Future Outlook: What are well-informed industry analysts predicting for TGR’s future growth? Take a look at our free research report of analyst consensus for TGR’s outlook.
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Valuation: What is TGR 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 TGR is currently mispriced by the market.
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Other 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.