Should Income Investors Buy Republic Services Inc (NYSE:RSG) Before Its Ex-Dividend?

Important news for shareholders and potential investors in Republic Services Inc (NYSE:RSG): The dividend payment of US$0.34 per share will be distributed into shareholder on 16 July 2018, and the stock will begin trading ex-dividend at an earlier date, 29 June 2018. Is this future income a persuasive enough catalyst for investors to think about Republic Services as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for Republic Services

5 checks you should use to assess a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• 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?

• 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?

NYSE:RSG Historical Dividend Yield June 26th 18

Does Republic Services pass our checks?

The company currently pays out 34.15% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect RSG’s payout to increase to 42.95% of its earnings, which leads to a dividend yield of around 2.07%. However, EPS is forecasted to fall to $3.12 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. RSG has increased its DPS from $0.68 to $1.38 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes RSG a true dividend rockstar.

Relative to peers, Republic Services generates a yield of 1.98%, which is on the low-side for Commercial Services stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Republic Services as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. Below, I’ve compiled three key factors you should look at:

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

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

3. 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 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.