Greif Inc (NYSE:GEF) has pleased shareholders over the past 10 years, paying out an average dividend of 3.00% annually. The stock currently pays out a dividend yield of 2.80%, and has a market cap of US$2.96B. Let’s dig deeper into whether Greif should have a place in your portfolio. View our latest analysis for Greif

Here’s how I find good dividend stocks

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is its annual yield among the top 25% of dividend-paying companies?

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

• Has dividend per share amount increased 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?

How well does Greif fit our criteria?

Greif has a trailing twelve-month payout ratio of 47.36%, which means that the dividend is covered by earnings. However, going forward, analysts expect GEF’s payout to fall to 42.40% of its earnings, which leads to a dividend yield of around 2.80%. However, EPS should increase to $3.9, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. In the case of GEF it has increased its DPS from $1.12 to $1.68 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. In terms of its peers, Greif generates a yield of 2.80%, which is high for Packaging stocks but still below the market’s top dividend payers.

Next Steps:

With these dividend metrics in mind, I definitely rank Greif as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 GEF’s future growth? Take a look at our free research report of analyst consensus for GEF’s outlook.

2. Valuation: What is GEF 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 GEF is currently mispriced by the market.

3. Other 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.