Have you been waiting for Pennsylvania Real Estate Investment Trust’s (NYSE:PEI) upcoming dividend of $0.21 per share? Then you only have to wait 9 more days before the stock pays out on 15 December 2017, and starts trading ex-dividend on the 30 November 2017. What does this mean for current shareholders and potential investors? Below, I will explain how holding PEI can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Pennsylvania Real Estate Investment Trust
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:
- 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 it increased its dividend per share amount over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does Pennsylvania Real Estate Investment Trust pass our checks?Pennsylvania Real Estate Investment Trust has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. 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. Not only have dividend payouts from Pennsylvania Real Estate Investment Trust fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. Compared to its peers, PEI generates a yield of 7.29%, 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 PEI right now, in terms of its dividend attributes. It may be valuable exploring other dividend stocks as alternatives to PEI or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by exploring 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 PEI’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, PEI could still be offering some interesting investment opportunities. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Dig deeper in our latest free fundmental analysis to explore other aspects of PEI.