Shares of Nexus Real Estate Investment Trust (TSXV:NXR.UN) will begin trading ex-dividend in 3 days. To qualify for the dividend check of CA$0.01 per share, investors must have owned the shares prior to 28 December 2017, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Nexus Real Estate Investment Trust and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for Nexus Real Estate Investment Trust
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is its annual yield among the top 25% of dividend-paying companies?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has the amount of dividend per share grown over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Nexus Real Estate Investment Trust fare?
The company currently pays out 155.23% of its earnings as a dividend, which means that the dividend is not well-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. 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 Nexus Real Estate Investment Trust as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Nexus Real Estate Investment Trust produces a yield of 7.88%, which is high for equity real estate investment trusts (reits) stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in Nexus Real Estate Investment Trust right now, in terms of its dividend attributes. It may be worth exploring other dividend stocks as alternatives to Nexus Real Estate Investment Trust or even look at high-growth stocks to supplement your steady income stocks. I recommend continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? After digging a little deeper into Nexus Real Estate Investment Trust’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. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Check our latest free fundmental analysis to explore other aspects of Nexus Real Estate Investment Trust.
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