If you are interested in cashing in on Terreno Realty Corporation’s (NYSE:TRNO) upcoming dividend of $0.22 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 12 January 2018. Is this future income a persuasive enough catalyst for investors to think about Terreno Realty 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. View our latest analysis for Terreno Realty
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
-
Is their annual yield among the top 25% of dividend payers?
-
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
-
Has dividend per share amount increased 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?
How well does Terreno Realty fit our criteria?
The current payout ratio for TRNO is 103.11%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a higher payout ratio of 169.31%, leading to a dividend yield of 2.54%. However, EPS is forecasted to fall to $0.57 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Terreno Realty as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Terreno Realty generates a yield of 2.53%, which is on the low-side for reits stocks.
What this means for you:
Are you a shareholder? You may be wondering why Terreno Realty is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be beneficial exploring other income stocks as alternatives to Terreno Realty 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 Terreno Realty’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. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Check our latest free fundmental analysis to explore other aspects of Terreno Realty.
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.