Yahoo Finance 2 Days Left To Cash In On Sabre Corporation (NASDAQ:SABR) Dividend,
Attention dividend hunters! Sabre Corporation (NASDAQ:SABR) will be distributing its dividend of US$0.14 per share on the 28 September 2018, and will start trading ex-dividend in 2 days time on the 20 September 2018. 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 Sabre’s most recent financial data to examine its dividend characteristics in more detail.
View our latest analysis for Sabre
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five 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 the amount of dividend per share grown over the past?
Is is able to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Sabre pass our checks?
The current trailing twelve-month payout ratio for the stock is 43.6%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 35.9%, leading to a dividend yield of 2.3%. In addition to this, EPS is also forecasted to fall to $1.17 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. 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 Sabre 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.
In terms of its peers, Sabre has a yield of 2.1%, which is high for IT stocks but still below the market’s top dividend payers.
Next Steps:
Taking all the above into account, Sabre is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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 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 SABR’s future growth? Take a look at our free research report of analyst consensus for SABR’s outlook.
Valuation: What is SABR 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 SABR 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
