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4 Days Left Before The Colonial Motor Company Limited (NZSE:CMO) Will Be Trading Ex-Dividend,

On the 15 October 2018, The Colonial Motor Company Limited (NZSE:CMO) will be paying shareholders an upcoming dividend amount of NZ$0.41 per share. However, investors must have bought the company’s stock before 04 October 2018 in order to qualify for the payment. That means you have only 4 days left! Is this future income a persuasive enough catalyst for investors to think about Colonial Motor as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.

See our latest analysis for Colonial Motor

How I analyze a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

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  • Is it the top 25% annual dividend yield payer?

  • Has it paid dividend every year without dramatically reducing payout in the past?

  • 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 it have the ability to keep paying its dividends going forward?

NZSE:CMO Historical Dividend Yield September 29th 18
NZSE:CMO Historical Dividend Yield September 29th 18

Does Colonial Motor pass our checks?

The current trailing twelve-month payout ratio for the stock is 65.4%, meaning the dividend is sufficiently 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 thinking about whether a dividend is sustainable, another factor to consider is the cash flow. 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. Although CMO’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

In terms of its peers, Colonial Motor produces a yield of 5.9%, which is high for Specialty Retail stocks.

Next Steps:

Keeping in mind the dividend characteristics above, Colonial Motor is definitely worth considering for investors looking to build a dedicated income portfolio. 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. Below, I’ve compiled three pertinent aspects you should look at:

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

  2. Historical Performance: What has CMO’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  3. Other 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.