What Makes Greif Inc (NYSE:GEF) A Great Dividend Stock?

Over the past 10 years Greif Inc (NYSE:GEF) has been paying dividends to shareholders. The company currently pays out a dividend yield of 3.4% to shareholders, making it a relatively attractive dividend stock. Let’s dig deeper into whether Greif should have a place in your portfolio.

Check out our latest analysis for Greif

Here’s how I find good dividend stocks

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

• Is it paying an annual yield above 75% of dividend payers?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has it increased its dividend per share amount 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:GEF Historical Dividend Yield October 5th 18

How well does Greif fit our criteria?

The current trailing twelve-month payout ratio for the stock is 40%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect GEF’s payout to remain around the same level at 42% of its earnings, which leads to a dividend yield of 3.4%. Moreover, EPS is forecasted to fall to $4.03 in the upcoming year.

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. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of GEF it has increased its DPS from $1.52 to $1.76 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.

In terms of its peers, Greif has a yield of 3.4%, which is high for Packaging stocks.

Next Steps:

With this in mind, I definitely rank Greif as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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. There are three essential factors you should look at:

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

2. Valuation: What is GEF 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 GEF 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 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.