Shares of Safestore Holdings plc (LSE:SAFE) will begin trading ex-dividend in 8 days. To qualify for the dividend check of £0.1 per share, investors must have owned the shares prior to 08 March 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Safestore Holdings’s latest financial data to analyse its dividend attributes. See our latest analysis for Safestore Holdings
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is it the top 25% annual dividend yield payer?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Is it 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 Safestore Holdings fit our criteria?
Safestore Holdings has a trailing twelve-month payout ratio of 37.41%, 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 SAFE’s payout to increase to 59.96% of its earnings, which leads to a dividend yield of around 3.35%. Furthermore, EPS should increase to £0.39. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. 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. SAFE has increased its DPS from £0.05 to £0.14 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. In terms of its peers, Safestore Holdings has a yield of 2.75%, which is on the low-side for REITs stocks.
With this in mind, I definitely rank Safestore Holdings as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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 factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for SAFE’s future growth? Take a look at our free research report of analyst consensus for SAFE’s outlook.
- Valuation: What is SAFE 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 SAFE is currently mispriced by the market.
- Other 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.