Yahoo Finance Only 3 Days Left To Cash In On Euromoney Institutional Investor PLC (LON:ERM) Dividend
If you are interested in cashing in on Euromoney Institutional Investor PLC’s (LON:ERM) upcoming dividend of UK£0.22 per share, you only have 3 days left to buy the shares before its ex-dividend date, 29 November 2018, in time for dividends payable on the 14 February 2019. 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 Euromoney Institutional Investor’s most recent financial data to examine its dividend characteristics in more detail.
View our latest analysis for Euromoney Institutional Investor
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Does it pay an annual yield higher than 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has the amount of dividend per share grown over the past?
Is is able to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
Does Euromoney Institutional Investor pass our checks?
Euromoney Institutional Investor has a trailing twelve-month payout ratio of 32%, which means that the dividend is covered by earnings. Going forward, analysts expect ERM’s payout to increase to 43% of its earnings, which leads to a dividend yield of around 2.7%. However, EPS is forecasted to fall to £0.53 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
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. Although ERM’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Euromoney Institutional Investor produces a yield of 2.6%, which is on the low-side for Media stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Euromoney Institutional Investor 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. There are three important factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for ERM’s future growth? Take a look at our free research report of analyst consensus for ERM’s outlook.
Valuation: What is ERM 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 ERM 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 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.
