Attention dividend hunters! Mirvac Group (ASX:MGR) will be distributing its dividend of A$0.05 per share on the 28 February 2018, and will start trading ex-dividend in 3 days time on the 28 December 2017. What does this mean for current shareholders and potential investors? Below, I will explain how holding Mirvac Group can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Mirvac Group
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Is their annual yield among the top 25% of dividend payers?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has dividend per share amount increased over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does Mirvac Group fit our criteria?
The current payout ratio for the stock is 33.08%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 70.91%, leading to a dividend yield of around 4.78%. However, EPS is forecasted to fall to A$0.15 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Dividend payments from Mirvac Group have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Relative to peers, Mirvac Group generates a yield of 4.33%, which is on the low-side for reits stocks.
What this means for you:
Are you a shareholder? If Mirvac Group is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be worth exploring other dividend stocks as alternatives to Mirvac Group or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking all the above into account, Mirvac Group is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Dig deeping in our latest free fundmental analysis to explore other aspects of Mirvac Group.
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.