A portfolio of stocks I'm building, named Ivy, holds 52 dividend dogs. Ivy is the fourth portfolio I've built (at a one dividend dog per week pace) since 2014. Four portfolios = IV!
Today I'm reviewing the fourth of five industrials sector stocks this week striving to become the seventh of eight from that sector to join the Ivy folio.
That industrials sector includes twenty-three industries all related to designing, fabricating and servicing stuff we want and use. The industrials industries range from aerospace and defense to waste management with all the transportation, business services, and equipment required in between.
Today I'm reviewing a mid-cap aerospace and defense company named Meggitt PLC. Their trading ticker symbol is MEGGY.
Meggitt is a British engineering company specializing in high-performance components and subsystems for the aerospace, defence, and energy markets.
In 2017, Meggitt generated GBP 2 billion in revenue. About 25% of revenue comes from Sensing Systems, 26% from Control Systems, 19% from Aircraft Braking Systems, and 13% from non-engine actuation and heat exchangers for energy and chemical industries, while polymers and composites generates the remaining 17% of sales.
The company was formerly known as Meggitt Holdings Public Limited Company and changed its name to Meggitt PLC in April 1989. Meggitt PLC was founded in 1947 and is headquartered in Christchurch, the United Kingdom.
I use three key data points to gauge dividend-paying equities or funds like Meggitt PLC:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest.
Those three basic keys, however, best tell whether a company has made, is making, and will make money.
MEGGY Price
Meggitt's price per share closed at $14.86 yesterday. A year ago its price was $14.69. Price rose $0.17 or 1.16% in the past year.
Assuming Meggitt's stock trades in the range of $12.00 to $16.00 this year, Meggitt's recent $14.86 price could rise by $1.14 and go to $16.00 by August 2020.
MEGGY Dividends
Meggitt's most recent semi-annual dividend was $0.5 paid July 11th.
That $0.0675 SA payout plus the previous dividend payout equates to an annual dividend of $0.36 generating a yield of 2.45% based on yesterday's $14.86 closing price.
Gains For MEGGY?
Adding the $0.36 annual estimated dividend to my $1.14 estimate of Meggitt's price upside shows a $1.50 potential gross annual gain, per share, which will be reduced by costs to trade those shares.
Say we pay a little under $1,000.00 today at the $14.86 recent stock price, we'd buy 67 Meggitt PLC shares.
A $10 broker fee paid half at purchase and half at sale will cost us $0.15 per share.
Subtract that $0.15 brokerage cost from the estimated $1.50 gross annual gain leaves a net gain of $1.35 X 67 shares = $90.45 or a 9.05% net gain on a $995.62 investment.
Therefore, Meggitt PLC whose trading ticker symbol is MEGGY now shows a possible net gain of 9% including a 2.45% dividend yield.
No brokers track Meggitt PLC stock:
I get no argument from the pros on this estimate.
My consensus score equates to "Hold"
Now we can look at Meggitt PLC and see it has made money, is making money, and could net a 9% gain including a 2.45% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to learn if Meggitt PLC is worth your time and money.
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