A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. CyrusOne Inc (NASDAQ:CONE) has returned to shareholders over the past 5 years, an average dividend yield of 3.00% annually. Should it have a place in your portfolio? Let’s take a look at CyrusOne in more detail. Check out our latest analysis for CyrusOne
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is it the top 25% annual dividend yield payer?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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Has dividend per share amount increased over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does CyrusOne fit our criteria?
CyrusOne has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. 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. The reality is that it is too early to consider CyrusOne as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, CyrusOne has a yield of 3.41%, which is on the low-side for REITs stocks.
Next Steps:
After digging a little deeper into CyrusOne’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, 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. I’ve put together three essential factors you should look at:
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Future Outlook: What are well-informed industry analysts predicting for CONE’s future growth? Take a look at our free research report of analyst consensus for CONE’s outlook.
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Valuation: What is CONE worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CONE is currently mispriced by the market.
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Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
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.