Yahoo Finance CLS Holdings plc (LON:CLI): 4 Days To Buy Before The Ex-Dividend Date
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Have you been keeping an eye on CLS Holdings plc's (LON:CLI) upcoming dividend of UK£0.047 per share payable on the 29 April 2019? Then you only have 4 days left before the stock starts trading ex-dividend on the 04 April 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into CLS Holdings's latest financial data to analyse its dividend attributes.
View our latest analysis for CLS Holdings
5 questions I ask before picking a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it paying an annual yield above 75% of dividend payers?
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?
Can it afford to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does CLS Holdings fare?
The company currently pays out 20% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect CLI's payout to increase to 52% of its earnings. Assuming a constant share price, this equates to a dividend yield of 3.0%. However, EPS is forecasted to fall to £0.13 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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. CLI investors will be well aware the dividend payments are lower today than they were 10 years ago, although the payments have at least been steady. Though this may not be a serious red flag, strong dividend stocks should always strive to increase its payout over time.
Relative to peers, CLS Holdings produces a yield of 2.8%, which is on the low-side for Real Estate stocks.
Next Steps:
Taking into account the dividend metrics, CLS Holdings ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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. I've put together three essential factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for CLI’s future growth? Take a look at our free research report of analyst consensus for CLI’s outlook.
Valuation: What is CLI 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 CLI 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.
