Have you been waiting for Retail Opportunity Investments Corp’s (NASDAQ:ROIC) upcoming dividend of $0.19 per share? Then you only have to wait 3 more days before the stock pays out on 28 December 2017, and starts trading ex-dividend on the 13 December 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into ROIC’s latest financial data to analyse its dividend attributes. Check out our latest analysis for Retail Opportunity Investments
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is its annual yield among the top 25% of dividend-paying companies?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has dividend per share amount increased over the past?
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Does earnings amply cover its dividend payments?
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Will it be able to continue to payout at the current rate in the future?
How does Retail Opportunity Investments fare?
Retail Opportunity Investments 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 ROIC’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 Retail Opportunity Investments as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Retail Opportunity Investments produces a yield of 3.85%, which is on the low-side for reits stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in ROIC right now, in terms of its dividend attributes. It may be beneficial exploring other dividend stocks as alternatives to ROIC or even look at high-growth stocks to complement your steady income stocks. I recommend continuing 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? Now you know to keep in mind the reason why investors should be careful investing in ROIC for the dividend. On the other hand, if you are not strictly just a dividend investor, ROIC could still be offering some interesting investment opportunities. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Take a look at our latest free fundmental analysis to explore other aspects of ROIC.
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.