Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Washington Real Estate Investment Trust (NYSE:WRE) has returned to shareholders over the past 10 years, an average dividend yield of 5.00% annually. Should it have a place in your portfolio? Let’s take a look at Washington Real Estate Investment Trust in more detail. View out our latest analysis for Washington Real Estate Investment Trust
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share risen in the past couple of years?
- Can it afford 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?
How does Washington Real Estate Investment Trust fare?
Although REITs are expected to payout a high portion of the earnings, Washington Real Estate Investment Trust currently pays out more than double its net income, meaning that dividend is predominantly funded by retained earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Not only have dividend payouts from Washington Real Estate Investment Trust fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. 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, Washington Real Estate Investment Trust has a yield of 4.04%, which is on the low-side for REITs stocks.
Now you know to keep in mind the reason why investors should be careful investing in Washington Real Estate Investment Trust 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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three fundamental factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for WRE’s future growth? Take a look at our free research report of analyst consensus for WRE’s outlook.
- Valuation: What is WRE 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 WRE 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.