There is a lot to be liked about Ocean Wilsons Holdings Limited (LSE:OCN) as an income stock, over the past 10 years it has returned an average of 3.00% per year. The stock currently pays out a dividend yield of 4.35%, and has a market cap of UK£397.83M. Does Ocean Wilsons Holdings tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Ocean Wilsons Holdings

5 questions I ask before picking a dividend stock

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

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

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

• Has dividend per share risen in the past couple of years?

• Is its earnings sufficient to payout dividend at the current rate?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

How does Ocean Wilsons Holdings fare?

The current trailing twelve-month payout ratio for the stock is 31.61%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 42.32%, leading to a dividend yield of 4.62%. However, EPS is forecasted to fall to $1.53 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. Compared to its peers, Ocean Wilsons Holdings has a yield of 4.35%, which is high for Infrastructure stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Ocean Wilsons Holdings 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. There are three important factors you should further examine:

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

2. Valuation: What is OCN 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 OCN 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.