2 Days Left To Cash In On Wolters Kluwer N.V. (AMS:WKL) Dividend

Simply Wall St

Shares of Wolters Kluwer N.V. (AMS:WKL) will begin trading ex-dividend in 2 days. To qualify for the dividend check of €0.64 per share, investors must have owned the shares prior to 24 April 2019, which is the last day the company's management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Wolters Kluwer and boost your portfolio income stream? Well, keep on reading because today, I'm going to look at the latest data and analyze the stock and its dividend property in further detail.

View our latest analysis for Wolters Kluwer

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?

  • 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?

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

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

ENXTAM:WKL Historical Dividend Yield, April 21st 2019
ENXTAM:WKL Historical Dividend Yield, April 21st 2019

How well does Wolters Kluwer fit our criteria?

Wolters Kluwer has a trailing twelve-month payout ratio of 41%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 38% which, assuming the share price stays the same, leads to a dividend yield of around 1.8%. Moreover, EPS is forecasted to fall to €2.27 in the upcoming year.

If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider 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. Dividend payments from Wolters Kluwer have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends.

Relative to peers, Wolters Kluwer generates a yield of 1.6%, which is on the low-side for Professional Services stocks.

Next Steps:

After digging a little deeper into Wolters Kluwer's yield, it's easy to see why you should be cautious investing in the company just 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, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. Below, I've compiled three key factors you should look at:

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

  2. Valuation: What is WKL 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 WKL 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.