Shares of DCT Industrial Trust Inc (NYSE:DCT) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.36 per share, investors must have owned the shares prior to 21 December 2017, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into DCT Industrial Trust 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 DCT Industrial Trust
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 consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share amount increased over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How well does DCT Industrial Trust fit our criteria?
DCT Industrial Trust has a payout ratio of 112.53%, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a higher payout ratio of 175.48%, leading to a dividend yield of around 2.35%. However, EPS is forecasted to fall to $0.8 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. Dividend payments from DCT Industrial Trust 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. Compared to its peers, DCT Industrial Trust has a yield of 2.42%, which is on the low-side for reits stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in DCT Industrial Trust right now, in terms of its dividend attributes. It may be beneficial exploring other dividend stocks as alternatives to DCT Industrial Trust or even look at high-growth stocks to complement your steady income stocks. I suggest continuing 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 DCT Industrial Trust for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Take a look at our latest free fundmental analysis to explore other aspects of DCT Industrial Trust.
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.