Yahoo Finance Does Delfingen Industry SA (EPA:ALDEL) Have A Place In Your Portfolio?
Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Historically, Delfingen Industry SA (EPA:ALDEL) has been paying a dividend to shareholders. Today it yields 3.0%. Does Delfingen Industry tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.
View our latest analysis for Delfingen Industry
Here’s how I find good dividend stocks
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 consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share amount increased over the past?
Is is able to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How well does Delfingen Industry fit our criteria?
The company currently pays out 24.3% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect ALDEL’s payout to remain around the same level at 22.0% of its earnings, which leads to a dividend yield of 2.5%. Furthermore, EPS is forecasted to fall to €3.43 in the upcoming year.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. 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. Not only have dividend payouts from Delfingen Industry fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
In terms of its peers, Delfingen Industry generates a yield of 3.0%, which is high for Auto Components stocks but still below the market’s top dividend payers.
Next Steps:
Whilst there are few things you may like about Delfingen Industry 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, 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 factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for ALDEL’s future growth? Take a look at our free research report of analyst consensus for ALDEL’s outlook.
Valuation: What is ALDEL 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 ALDEL 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.
