Dividends4Life: Should You Buy Patterson Companies, Inc. For Its Dividend?

Dividend paying stocks like Patterson Companies, Inc. (NASDAQ:PDCO) tend to be popular with investors, and for good reason – some research suggests a significant amount of all stock market returns come from reinvested dividends. If you are hoping to live on the income from dividends, it’s important to be a lot more stringent with your investments than the average punter.

To summarise, shareholders should always check that Patterson Companies’s dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. We’re not keen on the fact that Patterson Companies paid out such a high percentage of its income, although its cashflow is in better shape. Second, earnings per share have been in decline, and the dividend history is shorter than we’d like. There are a few too many issues for us to get comfortable with Patterson Companies from a dividend perspective. Businesses can change, but we would struggle to identify why an investor should rely on this stock for their income. Given that earnings are not growing, the dividend does not look nearly so attractive.

Source: Simply Wall St.

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