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Port of Tauranga Limited (NZSE:POT): Ex-Dividend Is In 4 Days

Important news for shareholders and potential investors in Port of Tauranga Limited (NZSE:POT): The dividend payment of NZ$0.071 per share will be distributed to shareholders on 22 March 2019, and the stock will begin trading ex-dividend at an earlier date, 07 March 2019. What does this mean for current shareholders and potential investors? Below, I will explain how holding Port of Tauranga can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.

View our latest analysis for Port of Tauranga

5 checks you should use to assess a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

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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 amount increased over the past?

  • Can it afford to pay the current rate of dividends from its earnings?

  • Will the company be able to keep paying dividend based on the future earnings growth?

NZSE:POT Historical Dividend Yield, March 2nd 2019
NZSE:POT Historical Dividend Yield, March 2nd 2019

How does Port of Tauranga fare?

The company currently pays out 91% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a payout ratio of 92%, which, assuming the share price stays the same, leads to a dividend yield of 2.9%. Furthermore, EPS should increase to NZ$0.15.

When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.

Compared to its peers, Port of Tauranga produces a yield of 3.3%, which is on the low-side for Infrastructure stocks.

Next Steps:

After digging a little deeper into Port of Tauranga’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 important factors you should look at:

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

  2. Valuation: What is POT 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 POT is currently mispriced by the market.

  3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.