Yahoo Finance Interested In Canadian Tire Corporation Limited (TSE:CTC.A)’s Upcoming CA$0.90 Dividend? You Have 4 Days Left
Have you been keeping an eye on Canadian Tire Corporation Limited’s (TSE:CTC.A) upcoming dividend of CA$0.90 per share payable on the 01 December 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 30 October 2018. Should you diversify into Canadian Tire and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
View our latest analysis for Canadian Tire
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?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has it increased its dividend per share amount 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 Canadian Tire pass our checks?
Canadian Tire has a trailing twelve-month payout ratio of 33%, which means that the dividend is covered by earnings. Going forward, analysts expect CTC.A’s payout to remain around the same level at 30% of its earnings, which leads to a dividend yield of around 2.6%. Furthermore, EPS should increase to CA$11.81.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider 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.
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. CTC.A has increased its DPS from CA$0.84 to CA$3.6 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 CTC.A a true dividend rockstar.
Relative to peers, Canadian Tire has a yield of 2.4%, which is on the low-side for Multiline Retail stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Canadian Tire is definitely worth considering for investors 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 important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for CTC.A’s future growth? Take a look at our free research report of analyst consensus for CTC.A’s outlook.
Valuation: What is CTC.A 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 CTC.A 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.
