ARMOUR Residential REIT Inc (NYSE:ARR): Ex-Dividend Is Coming In 3 Days, Should You Buy?
If you are interested in cashing in on ARMOUR Residential REIT Inc’s (NYSE:ARR) upcoming dividend of $0.19 per share, you only have 3 days left to buy the shares before its ex-dividend date, 12 January 2018, in time for dividends payable on the 29 January 2018. Should you diversify into ARMOUR Residential REIT 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. Check out our latest analysis for ARMOUR Residential REIT
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:
Is their annual yield among the top 25% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
How does ARMOUR Residential REIT fare?
ARMOUR Residential REIT has a payout ratio of 47.60%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 98.42%, leading to a dividend yield of around 8.99%. However, EPS is forecasted to fall to $3.38 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 dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. The reality is that it is too early to consider ARMOUR Residential REIT as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, ARMOUR Residential REIT has a yield of 9.05%, which is on the low-side for mortgage reits stocks.
What this means for you:
Are you a shareholder? Whilst there are few things you may like about ARMOUR Residential REIT from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. It may be worth exploring other income stocks as alternatives to ARMOUR Residential REIT or even look at high-growth stocks to complement your steady income stocks. I recommend continuing 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? If you are building an income portfolio, then ARMOUR Residential REIT is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer 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. Take a look at our latest free fundmental analysis to explore other aspects of ARMOUR Residential REIT.
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.
