Attention dividend hunters! HollyFrontier Corporation (NYSE:HFC) will be distributing its dividend of $0.33 per share in 3 days time, on the 13 December 2017, and will start trading ex-dividend on the 20 November 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine HFC’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for HollyFrontier

How I analyze a dividend stock

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

• Is it the top 25% annual dividend yield payer?

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

• Has the amount of dividend per share grown over the past?

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

• Will it be able to continue to payout at the current rate in the future?

How well does HollyFrontier fit our criteria?

HollyFrontier has a payout ratio of 69.32%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 51.31%, leading to a dividend yield of around 3.27%. However, EPS should increase to $2.69, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Compared to its peers, HFC generates a yield of 3.08%, which is on the low-side for oil, gas and consumable fuels stocks.

What this means for you:

Are you a shareholder?

Are you a shareholder? With HollyFrontier producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. However, depending on your current holdings, it may be worth exploring other income stocks to enhance your diversification, or even look at high-growth stocks to complement your steady income stocks. I recommend continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? With these dividend metrics in mind, I definitely rank HollyFrontier as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Whether or not you like HFC as a dividend stock, it’s still worth checking the price tag. Can you buy HFC for a great price? Take a look at our latest free analysis to find out!

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.