Shares of Charter Hall Long WALE REIT (ASX:CLW) will begin trading ex-dividend in 2 days. To qualify for the dividend check of A$0.07 per share, investors must have owned the shares prior to 28 March 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Charter Hall Long WALE REIT and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View our latest analysis for Charter Hall Long WALE REIT

5 checks you should do on a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Does it pay an annual yield higher than 75% of dividend payers?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has it increased its dividend per share amount over the past?

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

• Will it be able to continue to payout at the current rate in the future?

How well does Charter Hall Long WALE REIT fit our criteria?

Charter Hall Long WALE REIT has a trailing twelve-month payout ratio of 21.71%, 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. In the near future, analysts are predicting a higher payout ratio of 98.45%, leading to a dividend yield of 7.12%. However, EPS is forecasted to fall to A$0.27 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. 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. Unfortunately, it is really too early to view Charter Hall Long WALE REIT as a dividend investment. Last year was the company’s first dividend payment, so it is certainly early days. The standard practice for reliable payers is to look for 10 or so years of track record. In terms of its peers, Charter Hall Long WALE REIT generates a yield of 3.00%, which is on the low-side for REITs stocks.

Next Steps:

Taking all the above into account, Charter Hall Long WALE REIT is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three fundamental factors you should further examine: