Yahoo Finance 3 Days Left Before Devro plc (LON:DVO) Will Be Trading Ex-Dividend
Shares of Devro plc (LON:DVO) will begin trading ex-dividend in 3 days. To qualify for the dividend check of UK£0.063 per share, investors must have owned the shares prior to 28 March 2019, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Devro’s most recent financial data to examine its dividend characteristics in more detail.
Check out our latest analysis for Devro
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Here’s how I find good dividend stocks
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Does it pay an annual yield higher than 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
How well does Devro fit our criteria?
Devro has a trailing twelve-month payout ratio of 120%, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 57%, which, assuming the share price stays the same, leads to a dividend yield of 5.0%. Moreover, EPS should increase to £0.14, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
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. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
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. DVO has increased its DPS from £0.044 to £0.090 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes DVO a true dividend rockstar.
In terms of its peers, Devro generates a yield of 4.6%, which is high for Food stocks but still below the market’s top dividend payers.
Next Steps:
With these dividend metrics in mind, I definitely rank Devro as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that 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. There are three pertinent factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for DVO’s future growth? Take a look at our free research report of analyst consensus for DVO’s outlook.
Valuation: What is DVO 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 DVO is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
