Yahoo Finance Interested In Marshalls plc (LON:MSLH)’s Upcoming UK£0.04 Dividend? You Have 4 Days Left
Have you been keeping an eye on Marshalls plc’s (LON:MSLH) upcoming dividend of UK£0.04 per share payable on the 05 December 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 18 October 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 Marshalls’s most recent financial data to examine its dividend characteristics in more detail.
Check out our latest analysis for Marshalls
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is its annual yield among the top 25% of dividend-paying companies?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Marshalls fit our criteria?
The current trailing twelve-month payout ratio for the stock is 48%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 56%, leading to a dividend yield of around 3.5%. Furthermore, EPS should increase to £0.26. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
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. Not only have dividend payouts from Marshalls fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
In terms of its peers, Marshalls has a yield of 2.6%, which is on the low-side for Basic Materials stocks.
Next Steps:
Taking all the above into account, Marshalls is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. Below, I’ve compiled three important aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for MSLH’s future growth? Take a look at our free research report of analyst consensus for MSLH’s outlook.
Valuation: What is MSLH 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 MSLH is currently mispriced by the market.
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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
