Investors who want to cash in on Dream Industrial Real Estate Investment Trust’s (TSX:DIR.UN) upcoming dividend of CA$0.06 per share have only 3 days left to buy the shares before its ex-dividend date, 27 February 2018, in time for dividends payable on the 15 March 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 Dream Industrial Real Estate Investment Trust’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Dream Industrial Real Estate Investment Trust
How I analyze 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 consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How does Dream Industrial Real Estate Investment Trust fare?
Although REITs are expected to payout a high portion of the earnings, Dream Industrial Real Estate Investment Trust currently pays out more than double its net income, which suggests that the dividend is not well-covered by earnings by any means. 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. 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 Dream Industrial Real Estate Investment Trust as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Dream Industrial Real Estate Investment Trust generates a yield of 7.71%, which is high for REITs stocks.
Now you know to keep in mind the reason why investors should be careful investing in Dream Industrial Real Estate Investment Trust 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. Below, I’ve compiled three pertinent aspects you should look at: