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Important news for shareholders and potential investors in Picton Property Income Limited (LSE:PCTN): The dividend payment of £0.01 per share will be distributed into shareholder on 31 May 2018, and the stock will begin trading ex-dividend at an earlier date, 10 May 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Picton Property Income’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Picton Property Income
5 questions I ask before picking 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 consistently paid a stable dividend without missing a payment or drastically cutting payout?
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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 it be able to continue to payout at the current rate in the future?
Does Picton Property Income pass our checks?
The company currently pays out 31.80% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect PCTN’s payout to increase to 83.51% of its earnings, which leads to a dividend yield of 4.00%. However, EPS is forecasted to fall to £0.08 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from Picton Property Income have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends. Compared to its peers, Picton Property Income generates a yield of 3.88%, which is high for Real Estate stocks but still below the market’s top dividend payers.
Next Steps:
If you are building an income portfolio, then Picton Property Income is a complicated choice since it has some positive aspects as well as negative ones. 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. Below, I’ve compiled three essential aspects you should further research: