Have you been keeping an eye on STORE Capital Corporation’s (NYSE:STOR) upcoming dividend of $0.31 per share payable on the 16 April 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 28 March 2018. Is this future income a persuasive enough catalyst for investors to think about STORE Capital 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 STORE Capital

5 questions I ask before picking a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• Is it paying an annual yield above 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 is able to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

How does STORE Capital 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 company currently pays out 132.62% of its earnings as a dividend, according to its trailing twelve-month data, meaning that a portion of dividend payments are funded by retained earnings. In the near future, analysts are predicting a payout ratio of 130.82%, leading to a dividend yield of 5.39%. Furthermore, EPS is forecasted to fall to $0.86 in the upcoming year. 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 STORE Capital 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. In terms of its peers, STORE Capital produces a yield of 5.07%, which is high for REITs stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in STORE Capital for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. I’ve put together three essential aspects you should look at: