Important news for shareholders and potential investors in Bucher Industries AG (VTX:BUCN): The dividend payment of CHF8.00 per share will be distributed to shareholders on 25 April 2019, and the stock will begin trading ex-dividend at an earlier date, 23 April 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Bucher Industries's latest financial data to analyse its dividend characteristics.

View our latest analysis for Bucher Industries

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?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share amount increased over the past?

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

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

How well does Bucher Industries fit our criteria?

The current trailing twelve-month payout ratio for the stock is 39%, 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 2.4%. Moreover, EPS should increase to CHF20.99.

When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

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. Although BUCN's per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time.

Compared to its peers, Bucher Industries generates a yield of 2.2%, which is high for Machinery stocks but still below the market's top dividend payers.

Next Steps:

Considering the dividend attributes we analyzed above, Bucher Industries is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 relevant aspects you should further research:

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

2. Valuation: What is BUCN 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 BUCN 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.