A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Starhill Global Real Estate Investment Trust (SGX:P40U) has returned to shareholders over the past 10 years, an average dividend yield of 8.00% annually. Let’s dig deeper into whether Starhill Global Real Estate Investment Trust should have a place in your portfolio. Check out our latest analysis for Starhill Global Real Estate Investment Trust
5 questions to ask before buying a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it the top 25% annual dividend yield payer?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share amount increased over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does Starhill Global Real Estate Investment Trust pass our checks?
REITs are a special-case dividend payer. This is because a high percentage of their earnings are required to be paid out as dividends. Starhill Global Real Estate Investment Trust has a trailing twelve-month payout ratio of 97.15%, which is in-line with most other REIT stocks. In the near future, analysts are predicting a payout ratio of 99.50%, leading to a dividend yield of around 7.16%. Furthermore, EPS should increase to SGD0.06. 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 Starhill Global Real Estate Investment Trust 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. Compared to its peers, Starhill Global Real Estate Investment Trust generates a yield of 7.13%, which is high for REITs stocks.
Keeping in mind the dividend characteristics above, Starhill Global Real Estate Investment Trust is definitely worth considering for investors looking to build a dedicated income portfolio. 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 examine:
- Future Outlook: What are well-informed industry analysts predicting for P40U’s future growth? Take a look at our free research report of analyst consensus for P40U’s outlook.
- Valuation: What is P40U 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 P40U is currently mispriced by the market.
- Other 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.