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If you are interested in cashing in on APAC Realty Limited’s (SGX:CLN) upcoming dividend of S$0.02 per share, you only have 2 days left to buy the shares before its ex-dividend date, 27 August 2018, in time for dividends payable on the 07 September 2018. Is this future income a persuasive enough catalyst for investors to think about APAC Realty 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 APAC Realty

How I analyze a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

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

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has dividend per share risen in the past couple of years?

• Is its earnings sufficient to payout dividend at the current rate?

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

Does APAC Realty pass our checks?

APAC Realty has a trailing twelve-month payout ratio of 51.06%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect CLN’s payout to increase to 64.95% of its earnings, which leads to a dividend yield of 6.60%. However, EPS is forecasted to fall to SGD0.064 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. Unfortunately, it is really too early to view APAC Realty 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, APAC Realty produces a yield of 6.72%, which is high for Real Estate stocks.

Next Steps:

Keeping in mind the dividend characteristics above, APAC Realty is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three essential factors you should further examine:

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

2. Valuation: What is CLN 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 CLN is currently mispriced by the market.

3. Other 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.