A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Urstadt Biddle Properties Inc (NYSE:UBA) has returned to shareholders over the past 10 years, an average dividend yield of 5.00% annually. Does Urstadt Biddle Properties tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. Check out our latest analysis for Urstadt Biddle Properties
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has the amount of dividend per share grown over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will it be able to continue to payout at the current rate in the future?
Does Urstadt Biddle Properties 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. Urstadt Biddle Properties has a trailing twelve-month payout ratio of 117.89%, meaning that a portion of dividend payments are funded by retained earnings. In the near future, analysts are predicting a higher payout ratio of 181.75%, leading to a dividend yield of 6.03%. 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 there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. UBA has increased its DPS from $0.95 to $1.08 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes UBA a true dividend rockstar. In terms of its peers, Urstadt Biddle Properties has a yield of 6.03%, which is high for REITs stocks.
Keeping in mind the dividend characteristics above, Urstadt Biddle Properties is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three pertinent aspects you should further examine:
- 1. Future Outlook: What are well-informed industry analysts predicting for UBA’s future growth? Take a look at our free research report of analyst consensus for UBA’s outlook.
- 2. Valuation: What is UBA 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 UBA is currently mispriced by the market.
- 3. 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.