Investors who want to cash in on Frasers Logistics & Industrial Trust’s (SGX:BUOU) upcoming dividend of A$0.04 per share have only 2 days left to buy the shares before its ex-dividend date, 16 May 2018, in time for dividends payable on the 07 August 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Frasers Logistics & Industrial Trust’s latest financial data to analyse its dividend attributes. View our latest analysis for Frasers Logistics & Industrial Trust

5 questions I ask before picking a dividend stock

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

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

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share amount increased over the past?

• Is it able to pay the current rate of dividends from its earnings?

• Will the company be able to keep paying dividend based on the future earnings growth?

Does Frasers Logistics & Industrial Trust pass our checks?

The current trailing twelve-month payout ratio for the stock is 23.23%, 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 BUOU’s payout to increase to 106.65% of its earnings, which leads to a dividend yield of around 6.41%. However, EPS is forecasted to fall to A$0.06 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 there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Frasers Logistics & Industrial Trust 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. Compared to its peers, Frasers Logistics & Industrial Trust has a yield of 6.06%, which is high for REITs stocks.

Next Steps:

If Frasers Logistics & Industrial Trust is in your portfolio for cash-generating reasons, there may be better alternatives out there. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. There are three relevant aspects you should further examine:

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

2. Valuation: What is BUOU 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 BUOU 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.