Yahoo Finance What Makes Swisscom AG (VTX:SCMN) A Great Dividend Stock?
Swisscom AG (VTX:SCMN) is a true Dividend Rock Star. Its yield of 4.80% makes it one of the market’s top dividend payer. In the past ten years, Swisscom has also grown its dividend from 18 to 22. Below, I have outlined more attractive dividend aspects for Swisscom for income investors who may be interested in new dividend stocks for their portfolio.
See our latest analysis for Swisscom
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
It is paying an annual yield above 75% of dividend payers
It consistently pays out dividend without missing a payment or significantly cutting payout
Its has increased its dividend per share amount over the past
It can afford to pay the current rate of dividends from its earnings
It has the ability to keep paying its dividends going forward
High Yield And Dependable
Swisscom currently yields 4.80%, which is on the low-side for Telecom stocks. But the real reason Swisscom stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
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. SCMN has increased its DPS from CHF18 to CHF22 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. This is an impressive feat, which makes SCMN a true dividend rockstar.
The current trailing twelve-month payout ratio for the stock is 72.21%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect SCMN’s payout to remain around the same level at 77.74% of its earnings, which leads to a dividend yield of around 4.80%. In addition to this, EPS is forecasted to fall to CHF29.02 in the upcoming year.
Next Steps:
Swisscom ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given 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. Below, I’ve compiled three fundamental factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for SCMN’s future growth? Take a look at our free research report of analyst consensus for SCMN’s outlook.
Valuation: What is SCMN 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 SCMN is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better 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.
