Only 6 Days Left Before Flowtech Fluidpower plc (LON:FLO) Will Start Trading Ex-Dividend, Is It Worth Buying?

Important news for shareholders and potential investors in Flowtech Fluidpower plc (AIM:FLO): The dividend payment of £0.04 per share will be distributed into shareholder on 13 July 2018, and the stock will begin trading ex-dividend at an earlier date, 07 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Flowtech Fluidpower’s latest financial data to analyse its dividend attributes. View our latest analysis for Flowtech Fluidpower

5 questions to ask before buying 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 of significantly cutting payout?

• Has dividend per share risen in the past couple of years?

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

• Will it be able to continue to payout at the current rate in the future?

AIM:FLO Historical Dividend Yield May 31st 18

How well does Flowtech Fluidpower fit our criteria?

Flowtech Fluidpower has a trailing twelve-month payout ratio of 59.61%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 35.64%, leading to a dividend yield of around 4.05%. However, EPS should increase to £0.13, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Unfortunately, it is really too early to view Flowtech Fluidpower as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Flowtech Fluidpower has a yield of 3.68%, which is high for Trade Distributors stocks but still below the market’s top dividend payers.

Next Steps:

Taking all the above into account, Flowtech Fluidpower is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 fundamental aspects you should further research:

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

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

3. 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.