SSP Group plc (LON:SSPG): Dividend Is Coming In 5 Days, Should You Buy?

On the 29 June 2018, SSP Group plc (LSE:SSPG) will be paying shareholders an upcoming dividend amount of £0.05 per share. However, investors must have bought the company’s stock before 31 May 2018 in order to qualify for the payment. That means you have only 5 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding SSP Group can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for SSP Group

Here’s how I find good dividend stocks

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is their annual yield among the top 25% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has dividend per share amount increased 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?

LSE:SSPG Historical Dividend Yield May 25th 18

How well does SSP Group fit our criteria?

The current trailing twelve-month payout ratio for the stock is 45.56%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect SSPG’s payout to fall to 40.21% of its earnings, which leads to a dividend yield of around 1.62%. However, EPS should increase to £0.24, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view SSP Group as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, SSP Group has a yield of 1.53%, which is on the low-side for Hospitality stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in SSP Group 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three essential aspects you should look at:

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

2. Valuation: What is SSPG 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 SSPG 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.