If you are interested in cashing in on Regal Real Estate Investment Trust’s (SEHK:1881) upcoming dividend of HK$0.07 per share, you only have 2 days left to buy the shares before its ex-dividend date, 10 May 2018, in time for dividends payable on the 29 May 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Regal Real Estate Investment Trust can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Regal Real Estate Investment Trust
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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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 it increased its dividend per share amount over the past?
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Is it 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 Regal Real Estate Investment Trust fit our criteria?
The company currently pays out 18.98% of its earnings as a dividend, according to its trailing twelve-month data, which is rather low compared to other REITs. Generally, REITs are expected to pay out the majority of its earnings to provide a regular income stream for their investors. Going forward, analysts expect 1881’s payout to increase to 105.20% of its earnings, which leads to a dividend yield of 6.66%. However, EPS is forecasted to fall to HK$0.15 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. This also brings about uncertainty around the sustainability of the payout ratio. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Regal Real Estate Investment Trust fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Compared to its peers, Regal Real Estate Investment Trust produces a yield of 6.02%, which is high for REITs stocks.
Next Steps:
If Regal Real Estate Investment Trust is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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 relevant aspects you should further research: