Interested In Mortgage Advice Bureau (Holdings) PLC (LON:MAB1)’s Upcoming UK£0.13 Dividend? You Have 1 Days Left
Important news for shareholders and potential investors in Mortgage Advice Bureau (Holdings) PLC (LON:MAB1): The dividend payment of UK£0.13 per share will be distributed to shareholders on 24 May 2019, and the stock will begin trading ex-dividend at an earlier date, 25 April 2019. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let's take a look at Mortgage Advice Bureau (Holdings)'s most recent financial data to examine its dividend characteristics in more detail.
See our latest analysis for Mortgage Advice Bureau (Holdings)
5 checks you should do on 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?
Will the company be able to keep paying dividend based on the future earnings growth?
How does Mortgage Advice Bureau (Holdings) fare?
The company currently pays out 90% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a payout ratio of 92%, which, assuming the share price stays the same, leads to a dividend yield of around 5.3%. In addition to this, EPS should increase to £0.28.
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. Unfortunately, it is really too early to view Mortgage Advice Bureau (Holdings) as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Mortgage Advice Bureau (Holdings) has a yield of 4.1%, which is on the low-side for Mortgage stocks.
Next Steps:
After digging a little deeper into Mortgage Advice Bureau (Holdings)'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. There are three fundamental aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for MAB1’s future growth? Take a look at our free research report of analyst consensus for MAB1’s outlook.
Valuation: What is MAB1 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 MAB1 is currently mispriced by the market.
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.
