Restaurant Brands New Zealand Limited (NZE:RBD): Dividend Is Coming In 3 Days, Should You Buy?

Important news for shareholders and potential investors in Restaurant Brands New Zealand Limited (NZSE:RBD): The dividend payment of NZ$0.21 per share will be distributed into shareholder on 22 June 2018, and the stock will begin trading ex-dividend at an earlier date, 31 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Restaurant Brands New Zealand’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for Restaurant Brands New Zealand

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:

• Is its annual yield among the top 25% of dividend-paying companies?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

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

• Is its earnings sufficient to payout dividend at the current rate?

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

NZSE:RBD Historical Dividend Yield May 27th 18

Does Restaurant Brands New Zealand pass our checks?

The current trailing twelve-month payout ratio for RBD is 97.13%, which means that the dividend is not well-covered by its earnings. However, going forward, analysts expect RBD’s payout to fall into a more sustainable range of 76.47% of its earnings, which leads to a dividend yield of around 4.23%. Furthermore, EPS should increase to NZ$0.37, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. 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, Restaurant Brands New Zealand produces a yield of 3.55%, which is high for Hospitality stocks but still below the market’s top dividend payers.

Next Steps:

Whilst there are few things you may like about Restaurant Brands New Zealand 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three relevant factors you should further research:

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

2. Valuation: What is RBD 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 RBD 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.

To help readers see pass 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.