Yahoo Finance Investors In CSL Limited (ASX:CSL) Should Consider This Data
Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Over the past 10 years, CSL Limited (ASX:CSL) has returned an average of 2.00% per year to shareholders in terms of dividend yield. Let’s dig deeper into whether CSL should have a place in your portfolio.
View our latest analysis for CSL
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is its annual yield among the top 25% of dividend-paying companies?
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?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
Does CSL pass our checks?
The current trailing twelve-month payout ratio for the stock is 45.00%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 44.82%, leading to a dividend yield of around 1.39%. Furthermore, EPS should increase to $4.33.
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. Dividend payments from CSL have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends.
Relative to peers, CSL has a yield of 1.19%, which is on the low-side for Biotechs stocks.
Next Steps:
After digging a little deeper into CSL’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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three relevant aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for CSL’s future growth? Take a look at our free research report of analyst consensus for CSL’s outlook.
Valuation: What is CSL 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 CSL 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.