Important news for shareholders and potential investors in Federal Realty Investment Trust (NYSE:FRT): The dividend payment of $1 per share will be distributed into shareholder on 16 January 2018, and the stock will begin trading ex-dividend at an earlier date, 29 December 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Federal Realty Investment Trust’s latest financial data to analyse its dividend attributes. Check out our latest analysis for Federal Realty Investment Trust
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Does it pay an annual yield higher than 75% of dividend payers?
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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 risen in the past couple of years?
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Is is able to pay the current rate of dividends from its earnings?
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Will it be able to continue to payout at the current rate in the future?
How well does Federal Realty Investment Trust fit our criteria?
The company currently pays out 95.78% of its earnings as a dividend, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a higher payout ratio of 113.95%, leading to a dividend yield of 3.14%. However, EPS is forecasted to fall to $3.31 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of FRT it has increased its DPS from $2.44 to $4 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes FRT a true dividend rockstar. Relative to peers, Federal Realty Investment Trust has a yield of 3.07%, which is on the low-side for reits stocks.
What this means for you:
Are you a shareholder? With Federal Realty Investment Trust producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. However, depending on your current holdings, it may be worth exploring other income stocks to improve your diversification, or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.