Chesapeake Lodging Trust (NYSE:CHSP): What You Have To Know Before Buying For The Upcoming Dividend

If you are interested in cashing in on Chesapeake Lodging Trust’s (NYSE:CHSP) upcoming dividend of US$0.40 per share, you only have 2 days left to buy the shares before its ex-dividend date, 28 June 2018, in time for dividends payable on the 13 July 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Chesapeake Lodging Trust’s latest financial data to analyse its dividend attributes. Check out our latest analysis for Chesapeake Lodging Trust

5 questions I ask before picking a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is it paying an annual yield above 75% of dividend payers?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has it increased its dividend per share amount 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?

NYSE:CHSP Historical Dividend Yield June 25th 18

How well does Chesapeake Lodging Trust fit our criteria?

REITs are a special-case dividend payer. This is because a high percentage of their earnings are required to be paid out as dividends. The company currently pays out 141.03% of its earnings as a dividend, according to its trailing twelve-month data, meaning that a portion of dividend payments are funded by retained earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Chesapeake Lodging Trust 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.

In terms of its peers, Chesapeake Lodging Trust produces a yield of 4.93%, which is high for REITs stocks.

Next Steps:

After digging a little deeper into Chesapeake Lodging 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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three pertinent factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for CHSP’s future growth? Take a look at our free research report of analyst consensus for CHSP’s outlook.

2. Valuation: What is CHSP 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 CHSP is currently mispriced by the market.

3. 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.