2 Days Left To Morses Club PLC (LON:MCL)’s Ex-Dividend Date, Should Investors Buy?

Shares of Morses Club PLC (LON:MCL) will begin trading ex-dividend in 2 days. To qualify for the dividend check of UK£0.048 per share, investors must have owned the shares prior to 28 June 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 take a deeper dive into Morses Club’s latest financial data to analyse its dividend attributes. See our latest analysis for Morses Club

5 checks you should do on a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is their annual yield among the top 25% of dividend payers?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has dividend per share amount increased over the past?

• Can it afford to pay the current rate of dividends from its earnings?

• Will the company be able to keep paying dividend based on the future earnings growth?

AIM:MCL Historical Dividend Yield June 25th 18

How well does Morses Club fit our criteria?

The company currently pays out 69.24% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 57.24%, leading to a dividend yield of 5.12%. Furthermore, EPS is also forecasted to fall to £0.10 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward.

Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider Morses Club as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Morses Club has a yield of 4.55%, which is high for Consumer Finance stocks.

Next Steps:

Considering the dividend attributes we analyzed above, Morses Club 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 aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for MCL’s future growth? Take a look at our free research report of analyst consensus for MCL’s outlook.

2. Valuation: What is MCL 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 MCL is currently mispriced by the market.

3. 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.