On the 31 May 2018, OUE Limited (SGX:LJ3) will be paying shareholders an upcoming dividend amount of SGD0.02 per share. However, investors must have bought the company’s stock before 15 May 2018 in order to qualify for the payment. That means you have only 5 days left! Is this future income a persuasive enough catalyst for investors to think about OUE as an investment today? Below, 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 OUE
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
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Does it pay an annual yield higher than 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 it increased its dividend per share amount over the past?
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Does earnings amply cover its dividend payments?
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Will it be able to continue to payout at the current rate in the future?
Does OUE pass our checks?
The company currently pays out 27.37% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 33.71%, leading to a dividend yield of around 1.83%. However, EPS is forecasted to fall to SGD0.09 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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. Not only have dividend payouts from OUE fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, OUE produces a yield of 1.65%, which is on the low-side for Real Estate stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in OUE for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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 factors you should look at: