Have you been keeping an eye on Liberty Property Trust’s (NYSE:LPT) upcoming dividend of $0.4 per share payable on the 15 April 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 29 March 2018. Is this future income a persuasive enough catalyst for investors to think about Liberty Property Trust 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. Check out our latest analysis for Liberty Property Trust

How I analyze 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?

• Does it consistently pay out dividends without missing a payment of significantly 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 does Liberty Property Trust 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 LPT is 89.15%, which is in-line with most other REIT stocks. Going forward, analysts expect LPT’s payout to increase to 121.20% of its earnings, which leads to a dividend yield of around 4.15%. However, EPS is forecasted to fall to $1.57 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. Not only have dividend payouts from Liberty Property Trust fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. Relative to peers, Liberty Property Trust generates a yield of 4.14%, which is on the low-side for REITs stocks.

Next Steps:

If Liberty Property 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. Below, I’ve compiled three fundamental factors you should further examine: