Attention dividend hunters! Mack-Cali Realty Corporation (NYSE:CLI) will be distributing its dividend of $0.2 per share on the 12 January 2018, and will start trading ex-dividend in 3 days time on the 02 January 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Mack-Cali Realty’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Mack-Cali Realty
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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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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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 does Mack-Cali Realty fare?
Mack-Cali Realty has a payout ratio of more than 200% of earnings, which suggests that the dividend is not well-covered by earnings by any means. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. 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. Dividend payments from Mack-Cali Realty have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Relative to peers, Mack-Cali Realty generates a yield of 3.66%, which is on the low-side for reits stocks.
What this means for you:
Are you a shareholder? You may be wondering why Mack-Cali 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 Mack-Cali Realty or even look at high-growth stocks to supplement 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? Now you know to keep in mind the reason why investors should be careful investing in Mack-Cali Realty for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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 Mack-Cali 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.