Have you been keeping an eye on Excelpoint Technology Ltd.'s (SGX:BDF) upcoming dividend of US$0.04 per share payable on the 15 May 2019? Then you only have 2 days left before the stock starts trading ex-dividend on the 24 April 2019. What does this mean for current shareholders and potential investors? Below, I will explain how holding Excelpoint Technology can impact your portfolio income stream, by analysing the stock's most recent financial data and dividend attributes.

See our latest analysis for Excelpoint Technology

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 the top 25% annual dividend yield payer?

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

• Has the amount of dividend per share grown over the past?

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

• Will it be able to continue to payout at the current rate in the future?

How does Excelpoint Technology fare?

The current trailing twelve-month payout ratio for the stock is 32%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

When assessing the forecast sustainability of a dividend it is also worth considering 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.

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. The reality is that it is too early to consider Excelpoint Technology as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Excelpoint Technology has a yield of 6.4%, which is high for Electronic stocks.

Next Steps:

Whilst there are few things you may like about Excelpoint Technology from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. I've put together three key factors you should look at:

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

2. Valuation: What is BDF 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 BDF 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.