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On the 25 May 2018, Ascendas India Trust (SGX:CY6U) will be paying shareholders an upcoming dividend amount of SGD0.01 per share. However, investors must have bought the company’s stock before 15 May 2018 in order to qualify for the payment. That means you have only 9 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding Ascendas India Trust can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Ascendas India Trust
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is its annual yield among the top 25% of dividend-paying companies?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has it increased its dividend per share amount over the past?
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Does earnings amply cover its dividend payments?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does Ascendas India Trust fit our criteria?
The company currently pays out 39.42% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 88.15%, leading to a dividend yield of around 6.29%. However, EPS is forecasted to fall to SGD0.07 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. Dividend payments from Ascendas India Trust have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Relative to peers, Ascendas India Trust produces a yield of 5.87%, which is high for Real Estate stocks.
Next Steps:
Taking into account the dividend metrics, Ascendas India Trust ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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. There are three fundamental aspects you should look at:
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Future Outlook: What are well-informed industry analysts predicting for CY6U’s future growth? Take a look at our free research report of analyst consensus for CY6U’s outlook.
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Valuation: What is CY6U 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 CY6U is currently mispriced by the market.
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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.