Shares of Regency Centers Corporation (NYSE:REG) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.56 per share, investors must have owned the shares prior to 15 May 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. 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 Regency Centers’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Regency Centers
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- 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?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
Does Regency Centers pass our checks?
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 current trailing twelve-month payout ratio for REG is 148.81%, meaning that a portion of dividend payments are funded by retained earnings. In the near future, analysts are predicting a payout ratio of 156.75%, leading to a dividend yield of 3.98%. Moreover, EPS should increase to $1.46. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from Regency Centers have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, Regency Centers has a yield of 3.79%, which is on the low-side for REITs stocks.
After digging a little deeper into Regency Centers’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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 relevant aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for REG’s future growth? Take a look at our free research report of analyst consensus for REG’s outlook.
- Valuation: What is REG 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 REG 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.