Yahoo Finance Only 2 Days Left To Magna International Inc (TSE:MG)’s Ex-Dividend Date, Should Investors Buy?
Attention dividend hunters! Magna International Inc (TSE:MG) will be distributing its dividend of US$0.33 per share on the 14 September 2018, and will start trading ex-dividend in 2 days time on the 30 August 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Magna International can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
View our latest analysis for Magna International
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 its annual yield among the top 25% of dividend-paying companies?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has the amount of dividend per share grown over the past?
Can it afford 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 Magna International pass our checks?
The company currently pays out 19.2% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 18.2%, leading to a dividend yield of 2.6%. Moreover, EPS should increase to $7.14.
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 MG’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.
Relative to peers, Magna International generates a yield of 2.5%, which is on the low-side for Auto Components stocks.
Next Steps:
Considering the dividend attributes we analyzed above, Magna International is definitely worth keeping an eye on for someone 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. I’ve put together three pertinent factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for MG’s future growth? Take a look at our free research report of analyst consensus for MG’s outlook.
Valuation: What is MG 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 MG 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.
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.
