Graco Inc (GGG) is set to pay a dividend out to shareholders on February 1st – and as the stock continues to climb over the past 3 months, investors are wondering if the stock is a buy today. We’ll take a look at a few things you need to know about this opportunity below.
Over the past year, Graco has paid out a total of $0.84/share in dividends. The upcoming dividend will be $0.23/share. And while this alone has enticed some investors, it’s important to consider whether the dividends the company is paying out are sustainable or not.
In looking at the company’s profits and cash flow, we can see that the dividend is fully covered. This, coupled with a lower payout ratio of 31%, indicates a good margin of safety that the dividend will not be cut anytime soon.
Now, if you’re interested in Graco purely for the dividend, it’s important to take note of the ex-dividend date. Essentially, you need to be on the company’s books as a shareholder before January 17th – otherwise, you run the risk of being left out of the dividend to be paid out on February 1st.
But beyond the dividend, is there any opportunity to invest in Graco right now? The stock hasn’t seen substantial movement over the past few weeks or even the past month – it’s up a modest 3.6% in the past week, and just 2.75% in the past month. But looking at the larger overall price trend for Graco, you’ll see it’s up about 20% in the past 3 months.
To help you make a decision on Graco based on tried-and-true stock analysis principles, we’ve identified three things you need to see through the VectorVest stock analysis software.
GGG Has Fair Upside Potential, Good Safety, and Very Good Timing
The VectorVest system allows you to effortlessly uncover and analyze opportunities in the stock market based on three easy-to-understand ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).
The ratings sit on a scale of 0.00-2.00, with 1.00 being the average. Ratings above the average indicate overperformance and vice versa. And, based on these three ratings, VectorVest provides a clear buy, sell, or hold recommendation for any given stock, at any given time. Here’s what’s going on with GGG right now:
- Fair Upside Potential: The RV rating assesses a stock’s long-term price appreciation potential (3 years out) compared to AAA corporate bond rates and risk. And right now, the RV rating of 0.98 is fair – just below the average. The stock is currently overvalued, though, with a current value of $44.68.
- Good Safety: Taking a look at the risk associated with GGG, the RS rating of 1.14 indicates good safety. This is based on the company’s financial consistency and predictability, debt-to-equity ratio, and business longevity.
- Very Good Timing: Finally, the stock has very good timing right now – with an RT rating of 1.28. This is calculated based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year.
These three ratings contribute to an overall VST rating of 1.16 for GGG – which is good. But is it enough to earn the stock a buy rating today? For a clear answer on what your next move should be, get a free stock analysis now!
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for GGG, it is overvalued but still has fair upside potential along with good safety and very good timing right now.
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