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Important news for shareholders and potential investors in RHT Health Trust (SGX:RF1U): The dividend payment of SGD0.01 per share will be distributed into shareholder on 01 March 2018, and the stock will begin trading ex-dividend at an earlier date, 19 February 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into RHT Health Trust’s latest financial data to analyse its dividend attributes. View our latest analysis for RHT Health Trust
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 paying an annual yield above 75% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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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 have the ability to keep paying its dividends going forward?
How well does RHT Health Trust fit our criteria?
The current payout ratio for RF1U is negative, meaning that the company is not yet profitable and is paying dividend by dipping into 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. Unfortunately, it is really too early to view RHT Health Trust 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, RHT Health Trust produces a yield of 2.98%, which is high for Healthcare stocks but still below the market’s top dividend payers.
Next Steps:
After digging a little deeper into RHT Health Trust’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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three fundamental factors you should look at:
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1. Future Outlook: What are well-informed industry analysts predicting for RF1U’s future growth? Take a look at our free research report of analyst consensus for RF1U’s outlook.
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2. Valuation: What is RF1U 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 RF1U is currently mispriced by the market.
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3. 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.