Only 6 Days Left To Cash In On Victrex plc (LON:VCT) Dividend, Should You Buy?

Have you been keeping an eye on Victrex plc’s (LSE:VCT) upcoming dividend of £0.13 per share payable on the 29 June 2018? Then you only have 6 days left before the stock starts trading ex-dividend on the 07 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Victrex’s latest financial data to analyse its dividend characteristics. See our latest analysis for Victrex

5 questions I ask before picking a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is its annual yield among the top 25% of dividend-paying companies?

• Does it consistently pay out dividends without missing a payment or significantly cutting payout?

• Has the amount of dividend per share grown over the past?

• Is its earnings sufficient to payout dividend at the current rate?

• Will the company be able to keep paying dividend based on the future earnings growth?

LSE:VCT Historical Dividend Yield May 31st 18

How well does Victrex fit our criteria?

Victrex has a trailing twelve-month payout ratio of 40.88%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 73.91%, leading to a dividend yield of around 3.54%. However, EPS is forecasted to fall to £1.3 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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. VCT has increased its DPS from £0.18 to £0.54 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Relative to peers, Victrex produces a yield of 1.91%, which is on the low-side for Chemicals stocks.

Next Steps:

Keeping in mind the dividend characteristics above, Victrex 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. I’ve put together three pertinent aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for VCT’s future growth? Take a look at our free research report of analyst consensus for VCT’s outlook.

2. Valuation: What is VCT 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 VCT is currently mispriced by the market.

3. 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.