Important news for shareholders and potential investors in Centuria Capital Group (ASX:CNI): The dividend payment of A$0.04 per share will be distributed into shareholder on 31 January 2018, and the stock will begin trading ex-dividend at an earlier date, 28 December 2017. Should you diversify into Centuria Capital Group and boost your portfolio income stream? Well, keep on reading because today, 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 Centuria Capital Group
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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Is their annual yield among the top 25% 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 it increased its dividend per share amount over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will it be able to continue to payout at the current rate in the future?
How well does Centuria Capital Group fit our criteria?
Centuria Capital Group has a payout ratio of more than 200% of earnings, which suggests that the dividend is not well-covered by earnings by any means. However, going forward, analysts expect CNI’s payout to fall into a more sustainable range of 71.84% of its earnings, which leads to a dividend yield of 5.84%. Moreover, EPS should increase to A$0.16, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. Not only have dividend payouts from Centuria Capital Group fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. Relative to peers, Centuria Capital Group generates a yield of 6.37%, which is high for capital markets stocks.
What this means for you:
Are you a shareholder? If Centuria Capital Group is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be beneficial exploring other income stocks as alternatives to Centuria Capital Group or even look at high-growth stocks to complement your steady income stocks. I recommend 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.