Yahoo Finance Only 4 Days Left To Cash In On Banco Bilbao Vizcaya Argentaria SA (BME:BBVA) Dividend,
Important news for shareholders and potential investors in Banco Bilbao Vizcaya Argentaria SA (BME:BBVA): The dividend payment of €0.081 per share will be distributed to shareholders on 10 October 2018, and the stock will begin trading ex-dividend at an earlier date, 08 October 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Banco Bilbao Vizcaya Argentaria’s most recent financial data to examine its dividend characteristics in more detail.
See our latest analysis for Banco Bilbao Vizcaya Argentaria
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is its annual yield among the top 25% of dividend-paying companies?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has the amount of dividend per share grown over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How does Banco Bilbao Vizcaya Argentaria fare?
The company currently pays out 48% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 43%, leading to a dividend yield of around 5.5%. However, EPS should increase to €0.74, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from Banco Bilbao Vizcaya Argentaria have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
In terms of its peers, Banco Bilbao Vizcaya Argentaria has a yield of 4.6%, which is high for Banks stocks but still below the market’s top dividend payers.
Next Steps:
Whilst there are few things you may like about Banco Bilbao Vizcaya Argentaria from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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 examine:
Future Outlook: What are well-informed industry analysts predicting for BBVA’s future growth? Take a look at our free research report of analyst consensus for BBVA’s outlook.
Valuation: What is BBVA 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 BBVA 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.
