Should Income Investors Buy Grand City Properties SA (ETR:GYC) Before Its Ex-Dividend?
Attention dividend hunters! Grand City Properties SA (ETR:GYC) will be distributing its dividend of €0.73 per share on the 02 July 2018, and will start trading ex-dividend in 2 days time on the 28 June 2018. Should you diversify into Grand City Properties 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 Grand City Properties
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Does it pay an annual yield higher than 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share amount increased over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
How well does Grand City Properties fit our criteria?
The current trailing twelve-month payout ratio for the stock is 20.67%, which means that the dividend is covered by earnings. Going forward, analysts expect GYC’s payout to increase to 55.76% of its earnings, which leads to a dividend yield of around 3.93%. However, EPS is forecasted to fall to €2.92 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
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. Unfortunately, it is really too early to view Grand City Properties 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.
Compared to its peers, Grand City Properties has a yield of 3.34%, which is high for Real Estate stocks but still below the market’s top dividend payers.
Next Steps:
If Grand City Properties is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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 essential aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for GYC’s future growth? Take a look at our free research report of analyst consensus for GYC’s outlook.
Valuation: What is GYC 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 GYC 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.
