If you are interested in cashing in on Stockland’s (ASX:SGP) upcoming dividend of A$0.13 per share, you only have 3 days left to buy the shares before its ex-dividend date, 28 December 2017, in time for dividends payable on the 28 February 2018. Should you diversify into Stockland and boost your portfolio income stream? Well, keep on reading because today, 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 Stockland
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five 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 the amount of dividend per share grown over the past?
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Can it afford to pay the current rate of dividends from its earnings?
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Will it have the ability to keep paying its dividends going forward?
How well does Stockland fit our criteria?
The company currently pays out 51.24% of its earnings as a dividend, which means that the dividend is covered by earnings. Going forward, analysts expect SGP’s payout to increase to 81.27% of its earnings, which leads to a dividend yield of 6.07%. However, EPS is forecasted to fall to A$0.33 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Not only have dividend payouts from Stockland fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Relative to peers, Stockland generates a yield of 5.65%, which is high for reits stocks.
What this means for you:
Are you a shareholder? Investors of Stockland can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, Stockland is one worth keeping around in your income portfolio. But, depending on your current portfolio, 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 checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.