Important news for shareholders and potential investors in Valiant Holding AG (VTX:VATN): The dividend payment of CHF4.40 per share will be distributed to shareholders on 22 May 2019, and the stock will begin trading ex-dividend at an earlier date, 20 May 2019. Should you diversify into Valiant Holding 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.

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Check out our latest analysis for Valiant Holding

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?

• Has it paid dividend every year without dramatically reducing payout in the past?

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

• Does earnings amply cover its dividend payments?

• Will it have the ability to keep paying its dividends going forward?

Does Valiant Holding pass our checks?

Valiant Holding has a trailing twelve-month payout ratio of 58%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 73% which, assuming the share price stays the same, leads to a dividend yield of around 5.0%. In addition to this, EPS should increase to CHF7.69. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.

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. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Valiant Holding as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Valiant Holding has a yield of 4.1%, which is high for Banks stocks.

Next Steps:

Taking into account the dividend metrics, Valiant Holding ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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. There are three fundamental aspects you should further research:

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

2. Valuation: What is VATN 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 VATN 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.

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.