Is Federal International (2000) Ltd (SGX:BDU) A Smart Choice For Dividend Investors?

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Federal International (2000) Ltd (SGX:BDU) has returned to shareholders over the past 10 years, an average dividend yield of 3.00% annually. Let’s dig deeper into whether Federal International (2000) should have a place in your portfolio. View out our latest analysis for Federal International (2000)

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:

• Is their annual yield among the top 25% of dividend payers?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has it increased its dividend per share amount over the past?

• Is is able to pay the current rate of dividends from its earnings?

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

SGX:BDU Historical Dividend Yield June 27th 18

Does Federal International (2000) pass our checks?

The company currently pays out 74.20% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is 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 dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Dividend payments from Federal International (2000) 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.

Compared to its peers, Federal International (2000) produces a yield of 7.84%, which is high for Trade Distributors stocks.

Next Steps:

Taking all the above into account, Federal International (2000) is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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. I’ve put together three fundamental aspects you should look at:

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

2. Historical Performance: What has BDU’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

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.