内容摘要：Dividends play a key role in compounding returns over time and can form a large part of our portfoli smith and wesson m&p 2.0 spec series holster

Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Historically,smith and wesson m&p 2.0 spec series holster Wheaton Precious Metals Corp. (

TSE:WPM

) has been paying a dividend to shareholders. Today it yields 1.9%. Does Wheaton Precious Metals tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.

Check out our latest analysis for Wheaton Precious Metals

How I analyze a dividend stock

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

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

Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

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 the company be able to keep paying dividend based on the future earnings growth?

TSX:WPM Historical Dividend Yield January 2nd 19

How does Wheaton Precious Metals fare?

The current trailing twelve-month payout ratio for the stock is 56%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect WPM’s payout to remain around the same level at 61% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 1.8%. Moreover, EPS should increase to $0.64.

When considering the sustainability of dividends,

it is also worth checking the cash flow of a company

. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.

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 Wheaton Precious Metals as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Relative to peers, Wheaton Precious Metals generates a yield of 1.9%, which is high for Metals and Mining stocks but still below the low risk savings rate.

Next Steps:

After digging a little deeper into Wheaton Precious Metals’s yield, it’s easy to see why you should be cautious investing in the company just 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, 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:

Story continues

Future Outlook

: What are well-informed industry analysts predicting for WPM’s future growth? Take a look at our

free research report of analyst consensus

for WPM’s outlook.

Valuation

: What is WPM 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 WPM 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

[email protected]

.

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