Why Close Brothers Group plc (LON:CBG) Is A Top Dividend Stocks

Over the past 10 years Close Brothers Group plc (LON:CBG) has returned an average of 5.00% per year from dividend payouts. The company is currently worth UK£2.21b, and now yields roughly 4.12%. Should it have a place in your portfolio? Let’s take a look at Close Brothers Group in more detail. View out our latest analysis for Close Brothers Group

5 checks you should use to assess a dividend stock

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

• Is it paying an annual yield above 75% of dividend payers?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has it increased its dividend per share amount over the past?

• Can it afford to pay the current rate of dividends from its earnings?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

LSE:CBG Historical Dividend Yield June 22nd 18

Does Close Brothers Group pass our checks?

The company currently pays out 46.07% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 47.85%, leading to a dividend yield of around 4.47%. Moreover, EPS should increase to £1.35.

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. In the case of CBG it has increased its DPS from £0.39 to £0.61 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes CBG a true dividend rockstar.

Compared to its peers, Close Brothers Group generates a yield of 4.12%, which is high for Capital Markets stocks but still below the market’s top dividend payers.

Next Steps:

Keeping in mind the dividend characteristics above, Close Brothers Group 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 essential aspects you should look at:

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

2. Valuation: What is CBG 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 CBG 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.