Is AC Spólka Akcyjna (WSE:ACG) A Strong Dividend Stock?

Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. In the past 6 years AC Spólka Akcyjna (WSE:ACG) has returned an average of 7.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at AC Spólka Akcyjna in more detail. View out our latest analysis for AC Spólka Akcyjna

How I analyze a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is it the top 25% annual dividend yield payer?
• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
• Has the amount of dividend per share grown over the past?
• Is its earnings sufficient to payout dividend at the current rate?
• Will it be able to continue to payout at the current rate in the future?

How does AC Spólka Akcyjna fare?

The company currently pays out 75.59% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by 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.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view AC Spólka Akcyjna 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.

Relative to peers, AC Spólka Akcyjna has a yield of 6.49%, which is high for Auto Components stocks but still below the market’s top dividend payers.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in AC Spólka Akcyjna 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, 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. Below, I’ve compiled three relevant factors you should further examine:

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