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Is the GWA Group Ltd dividend attractive at this share price?

Photo:Caroma.com.au

The GWA Group Ltd (ASX: GWA) share price is up 10% in the past three months to trade at $3.21, and now boasts a twelve-month trailing dividend yield of 5.1%.

The building products company is involved in the design and manufacture of building fixtures and fittings such as toilets, taps, basins, sinks and laundry tubs according to Google Finance. GWA Group is heavily dependent on activity in the home renovation market as well as new home builds.

With signs that building activity is slowing, and increased financial pressure on households from higher energy bills, GWA Group may be entering a twilight period.

Earnings may have peaked, and dividends could be cut in the next few years, until the building cycle picks up again. With a trailing P/E ratio of 15.9x according to Google Finance, GWA’s share price is not cheap, and Foolish investors might want to wait for a better price. Alternatively, we have several other options for investors looking for yield below.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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