Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. In the past 3 years National Storage Affiliates Trust (NYSE:NSA) has returned an average of 4.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at National Storage Affiliates Trust in more detail. View our latest analysis for National Storage Affiliates Trust
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Does earnings amply cover its dividend payments?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does National Storage Affiliates Trust fare?
Although REITs are expected to payout a high portion of the earnings, National Storage Affiliates Trust currently pays out more than double its net income, meaning that dividend is predominantly funded by retained earnings. In the near future, analysts are predicting a more sensible payout ratio of 117.33%, leading to a dividend yield of 4.58%. Furthermore, EPS should increase to $0.03, 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. The reality is that it is too early to consider National Storage Affiliates Trust as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, National Storage Affiliates Trust has a yield of 4.34%, which is on the low-side for REITs stocks.
After digging a little deeper into National Storage Affiliates 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, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three key aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for NSA’s future growth? Take a look at our free research report of analyst consensus for NSA’s outlook.
- Valuation: What is NSA 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 NSA is currently mispriced by the market.
- 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.