Does Mangalore Chemicals & Fertilizers Limited (NSE:MANGCHEFER) Have A Place In Your Portfolio?

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Mangalore Chemicals & Fertilizers Limited (NSE:MANGCHEFER) has returned to shareholders over the past 10 years, an average dividend yield of 2.00% annually. Should it have a place in your portfolio? Let’s take a look at Mangalore Chemicals & Fertilizers in more detail. Check out our latest analysis for Mangalore Chemicals & Fertilizers

5 checks you should use to assess 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?

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

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

• Is its earnings sufficient to payout dividend at the current rate?

• Will it have the ability to keep paying its dividends going forward?

NSEI:MANGCHEFER Historical Dividend Yield June 23rd 18

Does Mangalore Chemicals & Fertilizers pass our checks?

Mangalore Chemicals & Fertilizers has a trailing twelve-month payout ratio of 19.57%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Although MANGCHEFER’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time.

Compared to its peers, Mangalore Chemicals & Fertilizers has a yield of 1.69%, which is high for Chemicals stocks.

Next Steps:

Keeping in mind the dividend characteristics above, Mangalore Chemicals & Fertilizers is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three important aspects you should further research:

1. Valuation: What is MANGCHEFER 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 MANGCHEFER is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Mangalore Chemicals & Fertilizers’s board and the CEO’s back ground.

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.