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Read This Before Buying Stride Stapled Group (NZE:SPG) For Its Upcoming $0.03 Dividend

If you are interested in cashing in on Stride Stapled Group’s (NZSE:SPG) upcoming dividend of NZ$0.03 per share, you only have 3 days left to buy the shares before its ex-dividend date, 13 June 2018, in time for dividends payable on the 21 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Stride Stapled Group’s latest financial data to analyse its dividend attributes. View our latest analysis for Stride Stapled Group

How I analyze a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

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  • 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 dividend per share risen in the past couple of years?

  • Does earnings amply cover its dividend payments?

  • Will it be able to continue to payout at the current rate in the future?

NZSE:SPG Historical Dividend Yield Jun 9th 18
NZSE:SPG Historical Dividend Yield Jun 9th 18

Does Stride Stapled Group pass our checks?

The current trailing twelve-month payout ratio for the stock is 37.97%, 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 SPG’s payout to increase to 92.36% of its earnings, which leads to a dividend yield of 5.37%. However, EPS is forecasted to fall to NZ$0.1 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. This also brings about uncertainty around the sustainability of the payout ratio. 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. The reality is that it is too early to consider Stride Stapled Group as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Stride Stapled Group generates a yield of 5.33%, which is high for REITs stocks but still below the market’s top dividend payers.

Next Steps:

If Stride Stapled Group is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. There are three key aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for SPG’s future growth? Take a look at our free research report of analyst consensus for SPG’s outlook.

  2. Valuation: What is SPG 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 SPG is currently mispriced by the market.

  3. 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.