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Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Over the past 2 years, Stride Stapled Group (NZSE:SPG) has returned an average of 6.00% per year to shareholders in terms of dividend yield. Should it have a place in your portfolio? Let’s take a look at Stride Stapled Group in more detail. See our latest analysis for Stride Stapled Group
5 checks you should use to assess 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 paying an annual yield above 75% of dividend payers?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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Has dividend per share risen in the past couple of years?
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Is it able to pay the current rate of dividends from its earnings?
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Will the company be able to keep paying dividend based on the future earnings growth?
How does Stride Stapled Group fare?
REITs are a special-case dividend payer. This is because a high percentage of their earnings are required to be paid out as dividends. The current trailing twelve-month payout ratio for SPG is 85.84%, which is in-line with most other REIT stocks. In the near future, analysts are predicting a payout ratio of 92.49%, leading to a dividend yield of around 5.87%. Moreover, EPS is forecasted to fall to NZ$0.12 in the upcoming year. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. 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 5.80%, which is high for REITs stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Stride Stapled Group is definitely worth considering for investors looking to build a dedicated income portfolio. 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 important aspects you should further examine:
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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.
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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.
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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.