Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. In the past 5 years Gladstone Land Corporation (NASDAQ:LAND) has returned an average of 5.00% per year to investors in the form of dividend payouts. Let’s dig deeper into whether Gladstone Land should have a place in your portfolio. View our latest analysis for Gladstone Land
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key 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 risen in the past couple of years?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does Gladstone Land fare?
The current payout ratio for LAND is negative, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Gladstone Land as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Gladstone Land generates a yield of 4.17%, which is on the low-side for REITs stocks.
Now you know to keep in mind the reason why investors should be careful investing in Gladstone Land for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three important aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for LAND’s future growth? Take a look at our free research report of analyst consensus for LAND’s outlook.
- Valuation: What is LAND 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 LAND 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.