Investors who want to cash in on Safestore Holdings plc’s (LSE:SAFE) upcoming dividend of £0.1 per share have only 3 days left to buy the shares before its ex-dividend date, 08 March 2018, in time for dividends payable on the 06 April 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Safestore Holdings’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Safestore Holdings
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is its annual yield among the top 25% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
Does Safestore Holdings pass our checks?
The company currently pays out 37.41% of its earnings as a dividend, according to its trailing twelve-month data, which is rather low compared to other REITs. Generally, REITs are expected to pay out the majority of its earnings to provide a regular income stream for their investors. In the near future, analysts are predicting a higher payout ratio of 59.96%, leading to a dividend yield of 3.40%. In addition to this, EPS should increase to £0.39. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors 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. SAFE has increased its DPS from £0.05 to £0.14 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Compared to its peers, Safestore Holdings has a yield of 2.79%, which is on the low-side for REITs stocks.
Taking into account the dividend metrics, Safestore Holdings ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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 important aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for SAFE’s future growth? Take a look at our free research report of analyst consensus for SAFE’s outlook.
- Valuation: What is SAFE 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 SAFE 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.