Interested In SEGRO Plc (LON:SGRO)’s Upcoming £0.11 Dividend? You Have 7 Days Left
Attention dividend hunters! SEGRO Plc (LSE:SGRO) will be distributing its dividend of £0.11 per share on the 03 May 2018, and will start trading ex-dividend in 7 days time on the 22 March 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into SEGRO’s latest financial data to analyse its dividend attributes. Check out our latest analysis for SEGRO
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 the amount of dividend per share grown over the past?
Can it afford to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does SEGRO pass our checks?
SEGRO has a trailing twelve-month payout ratio of 16.85%, 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. Going forward, analysts expect SGRO’s payout to increase to 80.08% of its earnings, which leads to a dividend yield of around 3.22%. However, EPS is forecasted to fall to £0.65 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Not only have dividend payouts from SEGRO fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. Compared to its peers, SEGRO produces a yield of 2.74%, which is on the low-side for REITs stocks.
Next Steps:
If SEGRO 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. I’ve put together three fundamental aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for SGRO’s future growth? Take a look at our free research report of analyst consensus for SGRO’s outlook.
Valuation: What is SGRO 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 SGRO 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.
