Yahoo Finance Investors In Canlan Ice Sports Corp (TSE:ICE) Should Consider This Data
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Historically, Canlan Ice Sports Corp (TSE:ICE) has paid a dividend to shareholders. It currently yields 1.8%. Does Canlan Ice Sports tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.
See our latest analysis for Canlan Ice Sports
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 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?
How well does Canlan Ice Sports fit our criteria?
Canlan Ice Sports has a trailing twelve-month payout ratio of 27%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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. The reality is that it is too early to consider Canlan Ice Sports as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Canlan Ice Sports has a yield of 1.8%, which is on the low-side for Hospitality stocks.
Next Steps:
After digging a little deeper into Canlan Ice Sports’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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 key aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for ICE’s future growth? Take a look at our free research report of analyst consensus for ICE’s outlook.
Valuation: What is ICE 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 ICE is currently mispriced by the market.
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.
