Read This Before Buying STORE Capital Corporation (NYSE:STOR) For Its Upcoming $0.31 Dividend
On the 16 January 2018, STORE Capital Corporation (NYSE:STOR) will be paying shareholders an upcoming dividend amount of $0.31 per share. However, investors must have bought the company’s stock before 28 December 2017 in order to qualify for the payment. That means you have only 3 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding STORE Capital can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for STORE Capital
5 questions I ask before picking 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 its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has the amount of dividend per share grown over the past?
Is its earnings sufficient to payout dividend at the current rate?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does STORE Capital pass our checks?
The current payout ratio for STOR is 131.43%, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a payout ratio of 134.14%, leading to a dividend yield of around 4.92%. Furthermore, EPS is forecasted to fall to $0.82 in the upcoming year. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider STORE Capital 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. In terms of its peers, STORE Capital has a yield of 4.85%, which is high for reits stocks.
What this means for you:
Are you a shareholder? You may be wondering why STORE Capital is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be beneficial exploring other income stocks as alternatives to STORE Capital 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? After digging a little deeper into STORE Capital’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. 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. Take a look at our latest free fundmental analysis to explore other aspects of STORE Capital.
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.
