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Arvida Group Limited (NZSE:ARV): What You Have To Know Before Buying For The Upcoming Dividend

Investors who want to cash in on Arvida Group Limited’s (NZSE:ARV) upcoming dividend of NZ$0.014 per share have only 4 days left to buy the shares before its ex-dividend date, 10 September 2018, in time for dividends payable on the 19 September 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Arvida Group can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.

View our latest analysis for Arvida Group

5 checks you should use to assess 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 its annual yield among the top 25% of dividend-paying companies?

  • Does it consistently pay out dividends without missing a payment of significantly cutting payout?

  • Has dividend per share risen in the past couple of years?

  • Does earnings amply cover its dividend payments?

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

NZSE:ARV Historical Dividend Yield September 5th 18
NZSE:ARV Historical Dividend Yield September 5th 18

How does Arvida Group fare?

Arvida Group has a trailing twelve-month payout ratio of 30.6%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 60.2%, leading to a dividend yield of 4.6%. However, EPS is forecasted to fall to NZ$0.095 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.

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 Arvida Group as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

In terms of its peers, Arvida Group has a yield of 3.6%, which is high for Healthcare stocks but still below the market’s top dividend payers.

Next Steps:

Whilst there are few things you may like about Arvida Group 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. There are three fundamental aspects you should look at:

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

  2. Historical Performance: What has ARV’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. 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.