In This Article:
Shares of Link Prop Investment AB (publ) (STO:LINKAB) will begin trading ex-dividend in 4 days. To qualify for the dividend check of kr2.00 per share, investors must have owned the shares prior to 12 October 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. What does this mean for current shareholders and potential investors? Below, I will explain how holding Link Prop Investment can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
View our latest analysis for Link Prop Investment
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
-
Is it the top 25% annual dividend yield payer?
-
Has it paid dividend every year without dramatically reducing payout in the past?
-
Has it increased its dividend per share amount over the past?
-
Does earnings amply cover its dividend payments?
-
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Link Prop Investment fit our criteria?
Link Prop Investment has a trailing twelve-month payout ratio of 135%, meaning the dividend is not sufficiently covered by its earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
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. Unfortunately, it is really too early to view Link Prop Investment as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Link Prop Investment generates a yield of 7.3%, which is high for Real Estate stocks.
Next Steps:
After digging a little deeper into Link Prop Investment’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three pertinent aspects you should further research: