If you are interested in cashing in on Apple Hospitality REIT Inc’s (NYSE:APLE) upcoming dividend of $0.1 per share, you only have 3 days left to buy the shares before its ex-dividend date, 02 November 2017, in time for dividends payable on the 15 November 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine APLE’s latest financial data to analyse its dividend characteristics. See our latest analysis for APLE

5 checks you should do on a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is it the top 25% annual dividend yield payer?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has dividend per share amount increased over the past?

• Is its earnings sufficient to payout dividend at the current rate?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

How does Apple Hospitality REIT fare?

The current payout ratio for APLE is 145.61%, meaning the dividend is not sufficiently covered by its earnings. Analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect to see 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. The reality is that it is too early to consider Apple Hospitality REIT 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. Relative to peers, APLE generates a yield of 6.35%, which is high for equity real estate investment trusts (reits) stocks.

What this means for you:

Are you a shareholder? You may be wondering why Apple Hospitality REIT is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be worth exploring other dividend stocks as alternatives to APLE or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? Now you know to keep in mind the reason why investors should be careful investing in APLE for the dividend. On the other hand, if you are not strictly just a dividend investor, APLE could still be offering some interesting investment opportunities. As with all investments, 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. Check our latest free fundmental analysis to explore other aspects of APLE.

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.