Albemarle Corporation (NYSE:ALB): 2 Days To Buy Before The Ex-Dividend Date
Attention dividend hunters! Albemarle Corporation (NYSE:ALB) will be distributing its dividend of US$0.37 per share on the 01 April 2019, and will start trading ex-dividend in 2 days time on the 14 March 2019…
From the Energy Metal News archive. This article dates from Mar 12, 2019 and is preserved as first published.
Attention dividend hunters! Albemarle Corporation (NYSE:ALB) will be distributing its dividend of US$0.37 per share on the 01 April 2019, and will start trading ex-dividend in 2 days time on the 14 March 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Albemarle’s latest financial data to analyse its dividend characteristics.
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is their annual yield among the top 25% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How does Albemarle fare?
The company currently pays out 21% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 19% which, assuming the share price stays the same, leads to a dividend yield of around 1.7%. Furthermore, EPS is also forecasted to fall to $6.34 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward.
The company currently pays out 21% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. 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. ALB has increased its DPS from $0.50 to $1.47 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes ALB a true dividend rockstar.
Relative to peers, Albemarle generates a yield of 1.8%, which is on the low-side for Chemicals stocks.
