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Should Seko SA (WSE:SEK) Be Part Of Your Portfolio?

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. In the past 5 years Seko SA (WSE:SEK) has returned an average of 4.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Seko in more detail. See our latest analysis for Seko

5 questions to ask before buying a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

  • Does it pay an annual yield higher than 75% of dividend payers?

  • Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

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

  • Can it afford 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?

WSE:SEK Historical Dividend Yield June 23rd 18
WSE:SEK Historical Dividend Yield June 23rd 18

Does Seko pass our checks?

The company currently pays out 29.16% 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.

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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. The reality is that it is too early to consider Seko as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Relative to peers, Seko has a yield of 4.29%, which is high for Food stocks but still below the market’s top dividend payers.

Next Steps:

After digging a little deeper into Seko’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. Below, I’ve compiled three relevant factors you should further examine:

  1. Valuation: What is SEK 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 SEK is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Seko’s board and the CEO’s back ground.

  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.