Important news for shareholders and potential investors in Mineral Commodities (ASX:MRC): The dividend payment of $0.01 per share will be distributed into shareholder on Thu 12 Oct 2017, and the stock will begin trading ex-dividend at an earlier date, Tue 05 Sep 2017. So if you want to cash in on MRC’s dividend payment and are not yet a shareholder, you have only few days left! Today I am going to take a look at MRC’s most recent financial data to examine its dividend characteristics in more detail.
What is the ex-dividend date?
If you purchase a stock on or after its ex-dividend date, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.
See our latest analysis for MRC
What should you know before buying Mineral Commodities (MRC) for its dividend
Mineral Commodities’s payout ratio is the first thing I want to look at to assess the strength of it’s dividend yield.
Payout ratio is a measure of the portion of a company’s earnings paid out to shareholders as a dividend. So a payout ratio of 50% would mean for every $1 earnt, the stock pays out 50c as a dividend. Likewise a payout ratio of 150% means a company cannot afford to pay their dividend using just its earnings and will need to dive into their cash reserves, or worse, issue debt to pay the remaining part.
The company currently pays out 57% of its earnings as a dividend, which means that the dividend is covered by earnings. Analysts have not forecast a dividends per share anticipate for 3 years time, which makes it hard to determine what yield shareholders should expect to see in the future. View our latest analysis for Mineral Commodities
The payout ratio is a strong indicator of a company’s ability to finance their dividend distribution, but I also encourage investors to look at how consistent those payouts have been over time.
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 increases. The reality is that it is too early to consider Mineral Commodities as a dividend investment. They have only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Mineral Commodities yields 9.42%, which is high for a materials stock.
What this means for you:
Are you a shareholder? Whilst there are few things you may like about Mineral Commodities from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor.If you’re holding MRC for other reasons, I recommend you revisit its fundamentals as well. If MRC makes up a large part of your stock portfolio, you may want to ensure strong future prospects as well.
Are you a potential investor? If you are building an income portfolio, then Mineral Commodities is a complicated choice since it has some positive aspects as well as negative ones.But if you are not exclusively a dividend investor, MRC could still be an interesting investment opportunity.I also recommend taking sufficient time to understand their core business and determine whether the company and it’s investment properties suit your overall goals.
If you’re still interest in the company, I recommend you take a look at our
latest FREE analysis to explore what investment opportunities Mineral Commodities may offer. If you are looking for great dividend payers I recommend you also take a look at our list of Dividend Rock Stars.
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