Yahoo Finance Is Moncler S.p.A. (BIT:MONC) A Smart Pick For Income Investors?
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A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Historically, Moncler S.p.A. (BIT:MONC) has paid dividends to shareholders, and these days it yields 1.1%. Should it have a place in your portfolio? Let's take a look at Moncler in more detail.
View our latest analysis for Moncler
5 checks you should use to assess 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-paying companies?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share risen in the past couple of years?
Can it afford to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Moncler fit our criteria?
The current trailing twelve-month payout ratio for the stock is 30%, which means that the dividend is covered by earnings. Going forward, analysts expect MONC's payout to increase to 35% of its earnings. Assuming a constant share price, this equates to a dividend yield of 1.4%. Furthermore, EPS should increase to €1.42. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
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. Unfortunately, it is really too early to view Moncler as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, Moncler generates a yield of 1.1%, which is on the low-side for Luxury stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Moncler for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. Below, I've compiled three pertinent aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for MONC’s future growth? Take a look at our free research report of analyst consensus for MONC’s outlook.
Valuation: What is MONC 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 MONC 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
