Important news for shareholders and potential investors in Gramercy Property Trust (NYSE:GPT): The dividend payment of $0.38 per share will be distributed into shareholder on 12 January 2018, and the stock will begin trading ex-dividend at an earlier date, 28 December 2017. Is this future income a persuasive enough catalyst for investors to think about Gramercy Property Trust as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for Gramercy Property Trust
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 its annual yield among the top 25% of dividend-paying companies?
-
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
-
Has it increased its dividend per share amount over the past?
-
Does earnings amply cover its dividend payments?
-
Will the company be able to keep paying dividend based on the future earnings growth?
Does Gramercy Property Trust pass our checks?
Gramercy Property Trust has a payout ratio of more than 200% of earnings, which suggests that the dividend is not well-covered by earnings by any means. Furthermore, analysts are forecasting the payout ratio to remain at this high level going forward, leading to a future of uncertainty around the stability of GPT’s dividend income. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. The reality is that it is too early to consider Gramercy Property Trust as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Gramercy Property Trust generates a yield of 5.57%, which is high for reits stocks.
What this means for you:
Are you a shareholder? You may be wondering why Gramercy Property Trust is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be valuable exploring other dividend stocks as alternatives to Gramercy Property Trust or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? After digging a little deeper into Gramercy Property Trust’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. As with all investments, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Take a look at our latest free fundmental analysis to explore other aspects of Gramercy Property Trust.
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.