Dexus (ASX:DXS): What You Have To Know Before Buying For The Upcoming Dividend

Attention dividend hunters! Dexus (ASX:DXS) will be distributing its dividend of AU$0.24 per share on the 30 August 2018, and will start trading ex-dividend in 2 days time on the 28 June 2018. Should you diversify into Dexus 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. View out our latest analysis for Dexus

5 checks you should use to assess a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Does it pay an annual yield higher than 75% of dividend payers?
• Does it consistently pay out dividends without missing a payment of significantly cutting payout?
• Has dividend per share amount increased over the past?
• Does earnings amply cover its dividend payments?
• Will it have the ability to keep paying its dividends going forward?

How does Dexus 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. Dexus has a trailing twelve-month payout ratio of 123.27%, meaning that a portion of dividend payments are funded by retained earnings. In the near future, analysts are predicting a more sensible payout ratio of 86.87%, leading to a dividend yield of 4.93%. In addition to this, EPS should increase to A$0.67, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. Not only have dividend payouts from Dexus 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.

Relative to peers, Dexus generates a yield of 4.79%, which is on the low-side for REITs stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in Dexus 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I've compiled three fundamental aspects you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for DXS’s future growth? Take a look at our free research report of analyst consensus for DXS’s outlook.
2. Valuation: What is DXS worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether DXS is currently mispriced by the market.
3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.