Should Income Investors Buy International Flavors & Fragrances Inc (NYSE:IFF) Before Its Ex-Dividend?

Have you been keeping an eye on International Flavors & Fragrances Inc’s (NYSE:IFF) upcoming dividend of $0.69 per share payable on the 06 July 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 22 June 2018. 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 International Flavors & Fragrances’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for International Flavors & Fragrances

5 questions I ask before picking a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

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

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has dividend per share risen in the past couple of years?

• Is it able 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?

NYSE:IFF Historical Dividend Yield Jun 19th 18

Does International Flavors & Fragrances pass our checks?

The company currently pays out 69.48% 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 43.56%, leading to a dividend yield of 2.44%. However, EPS should increase to $6.14, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. In the case of IFF it has increased its DPS from $0.92 to $2.76 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Compared to its peers, International Flavors & Fragrances produces a yield of 2.19%, which is on the low-side for Chemicals stocks.

Next Steps:

Keeping in mind the dividend characteristics above, International Flavors & Fragrances is definitely worth considering for investors 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 key aspects you should look at:

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

2. Valuation: What is IFF 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 IFF 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.