Have you been waiting for Equinix Inc (REIT)’s (NASDAQ:EQIX) upcoming dividend of $2 per share? Then you only have to wait 3 more days before the stock pays out on 13 December 2017, and starts trading ex-dividend on the 14 November 2017. Is this future income a persuasive enough catalyst for investors to think about EQIX as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for EQIX
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- 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?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How well does Equinix (REIT) fit our criteria?
The company currently pays out more than double of its earnings as a dividend, meaning that the dividend is predominantly funded by retained earnings. In the near future, analysts are predicting a payout ratio of 130.51% and dividends yield to be around 1.96%. Furthermore, EPS should increase to $5.84. This means shareholders should be concerned with the company’s ability to continue paying. 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. The reality is that it is too early to consider Equinix (REIT) 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. Relative to peers, EQIX has a yield of 1.65%, which is on the low-side for equity real estate investment trusts (reits) stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in EQIX right now, in terms of its dividend attributes. It may be worth exploring other income stocks as alternatives to EQIX or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Now you know to keep in mind the reason why investors should be careful investing in EQIX for the dividend. But if you are not exclusively a dividend investor, EQIX could still be an interesting investment opportunity. As with all investments, 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. Check our latest free fundmental analysis to explore other aspects of EQIX.
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.