Important news for shareholders and potential investors in Komax Holding AG (VTX:KOMN): The dividend payment of CHF7.00 per share will be distributed to shareholders on 24 April 2019, and the stock will begin trading ex-dividend at an earlier date, 18 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 Komax Holding's most recent financial data to examine its dividend characteristics in more detail.
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How well does Komax Holding fit our criteria?
The current trailing twelve-month payout ratio for the stock is 52%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 52% which, assuming the share price stays the same, leads to a dividend yield of 3.3%. Furthermore, EPS is forecasted to fall to CHF11.67 in the upcoming year.
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.
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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.
In terms of its peers, Komax Holding produces a yield of 3.1%, which is high for Machinery stocks but still below the market's top dividend payers.
Taking into account the dividend metrics, Komax 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. I've put together three fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for KOMN’s future growth? Take a look at our free research report of analyst consensus for KOMN’s outlook.
- Valuation: What is KOMN 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 KOMN is currently mispriced by the market.
- 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 firstname.lastname@example.org. 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.