Yahoo Finance K-Bro Linen Inc (TSE:KBL): What You Have To Know Before Buying For The Upcoming Dividend
Have you been keeping an eye on K-Bro Linen Inc’s (TSX:KBL) upcoming dividend of CA$0.1 per share payable on the 15 June 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 30 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine K-Bro Linen’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for K-Bro Linen
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
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?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
How does K-Bro Linen fare?
K-Bro Linen has a trailing twelve-month payout ratio of more than 200% of earnings, which suggests that the dividend is not well-covered by earnings by any means. In the near future, analysts are predicting a more sensible payout ratio of 72.75%, leading to a dividend yield of around 3.43%. In addition to this, EPS should increase to CA$1.09, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of KBL it has increased its DPS from CA$1.1 to CA$1.2 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes KBL a true dividend rockstar. Relative to peers, K-Bro Linen has a yield of 3.43%, which is high for Commercial Services stocks but still below the market’s top dividend payers.
Next Steps:
Considering the dividend attributes we analyzed above, K-Bro Linen is definitely worth keeping an eye on for someone 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. There are three fundamental aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for KBL’s future growth? Take a look at our free research report of analyst consensus for KBL’s outlook.
Valuation: What is KBL 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 KBL 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.
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.