Advertisement
Canada markets open in 6 minutes
  • S&P/TSX

    22,107.08
    +194.56 (+0.89%)
     
  • S&P 500

    5,248.49
    +44.91 (+0.86%)
     
  • DOW

    39,760.08
    +477.75 (+1.22%)
     
  • CAD/USD

    0.7371
    -0.0002 (-0.02%)
     
  • CRUDE OIL

    82.47
    +1.12 (+1.38%)
     
  • Bitcoin CAD

    95,891.22
    -740.04 (-0.77%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,232.10
    +19.40 (+0.88%)
     
  • RUSSELL 2000

    2,114.35
    +44.19 (+2.13%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ futures

    18,505.25
    +1.50 (+0.01%)
     
  • VOLATILITY

    12.96
    +0.18 (+1.41%)
     
  • FTSE

    7,952.25
    +20.27 (+0.26%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6817
    +0.0012 (+0.18%)
     

Martinrea International Inc. (TSE:MRE): Ex-Dividend Is In 2 Days

Important news for shareholders and potential investors in Martinrea International Inc. (TSE:MRE): The dividend payment of CA$0.045 per share will be distributed to shareholders on 15 January 2019, and the stock will begin trading ex-dividend at an earlier date, 28 December 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Martinrea International can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.

See our latest analysis for Martinrea International

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:

ADVERTISEMENT
  • Is it the top 25% annual dividend yield payer?

  • 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 it have the ability to keep paying its dividends going forward?

TSX:MRE Historical Dividend Yield December 25th 18
TSX:MRE Historical Dividend Yield December 25th 18

How well does Martinrea International fit our criteria?

Martinrea International has a trailing twelve-month payout ratio of 7.2%, which means that the dividend is covered by earnings. Going forward, analysts expect MRE’s payout to remain around the same level at 6.7% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 1.7%. In addition to this, EPS should increase to CA$2.43.

When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Martinrea International as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Martinrea International has a yield of 1.7%, which is on the low-side for Auto Components stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in Martinrea International 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 relevant aspects you should further research:

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

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

  3. 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.