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Only 3 Days Left Until Superior Industries International, Inc. (NYSE:SUP) Trades Ex-Dividend

Simply Wall St

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Have you been keeping an eye on Superior Industries International, Inc.'s (NYSE:SUP) upcoming dividend of US$0.09 per share payable on the 18 April 2019? Then you only have 3 days left before the stock starts trading ex-dividend on the 03 April 2019. What does this mean for current shareholders and potential investors? Below, I will explain how holding Superior Industries International can impact your portfolio income stream, by analysing the stock's most recent financial data and dividend attributes.

Check out our latest analysis for Superior Industries International

How I analyze a dividend stock

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

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  • Is it paying an annual yield above 75% 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?

  • Is is able 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?

NYSE:SUP Historical Dividend Yield, March 30th 2019
NYSE:SUP Historical Dividend Yield, March 30th 2019

How well does Superior Industries International fit our criteria?

Superior Industries International has a trailing twelve-month payout ratio of 124%, meaning the dividend is not sufficiently covered by its 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 considering the sustainability of dividends, it is also worth checking the cash flow of a company. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

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. Dividend payments from Superior Industries International 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.

In terms of its peers, Superior Industries International generates a yield of 7.6%, which is high for Auto Components stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in Superior Industries International for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 important aspects you should further research:

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

  2. Valuation: What is SUP 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 SUP 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.