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There is a lot to be liked about Cedar Woods Properties Limited (ASX:CWP) as an income stock, over the past 10 years it has returned an average of 5.00% per year. The company is currently worth AU$474.93M, and now yields roughly 4.98%. Does Cedar Woods Properties tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Cedar Woods Properties
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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Is it the top 25% annual dividend yield payer?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has the amount of dividend per share grown over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Cedar Woods Properties fare?
The current trailing twelve-month payout ratio for the stock is 52.08%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect CWP’s payout to remain around the same level at 50.66% of its earnings, which leads to a dividend yield of 5.76%. Moreover, EPS should increase to A$0.58. 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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. In terms of its peers, Cedar Woods Properties has a yield of 4.98%, which is high for Real Estate stocks.
Next Steps:
Taking into account the dividend metrics, Cedar Woods Properties 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, 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. I’ve put together three fundamental factors you should further examine:
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1. Future Outlook: What are well-informed industry analysts predicting for CWP’s future growth? Take a look at our free research report of analyst consensus for CWP’s outlook.
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2. Valuation: What is CWP 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 CWP is currently mispriced by the market.
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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.