Are You An Income Investor? Don’t Miss Out On Whitbread PLC (LON:WTB)

Over the past 10 years Whitbread PLC (LON:WTB) has returned an average of 3.00% per year from dividend payouts. The company is currently worth UK£7.52b, and now yields roughly 2.47%. Let’s dig deeper into whether Whitbread should have a place in your portfolio. View out our latest analysis for Whitbread

5 questions to ask before buying a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is it the top 25% annual dividend yield payer?

• 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?

LSE:WTB Historical Dividend Yield June 24th 18

Does Whitbread pass our checks?

The company currently pays out 42.19% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 38.98%, leading to a dividend yield of 2.73%. Furthermore, EPS should increase to £2.63.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. WTB has increased its DPS from £0.36 to £1.01 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. These are all positive signs of a great, reliable dividend stock.

In terms of its peers, Whitbread has a yield of 2.47%, which is on the low-side for Hospitality stocks.

Next Steps:

Keeping in mind the dividend characteristics above, Whitbread 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. I’ve put together three fundamental aspects you should further research:

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

2. Valuation: What is WTB 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 WTB 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.