If you are interested in cashing in on Atrium Mortgage Investment Corporation’s (TSX:AI) upcoming dividend of CA$0.08 per share, you only have 3 days left to buy the shares before its ex-dividend date, 27 February 2018, in time for dividends payable on the 12 March 2018. Is this future income a persuasive enough catalyst for investors to think about Atrium Mortgage Investment 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 Atrium Mortgage Investment
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Atrium Mortgage Investment fare?The company currently pays out 92.77% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. Going forward, analysts expect AI’s payout to remain around the same level at 96.59% of its earnings, which leads to a dividend yield of 7.67%. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Atrium Mortgage Investment 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. Compared to its peers, Atrium Mortgage Investment produces a yield of 7.45%, which is high for Mortgage stocks.
After digging a little deeper into Atrium Mortgage Investment’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, 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. There are three key factors you should look at:
- 1. Valuation: What is AI 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 AI is currently mispriced by the market.
- 2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Atrium Mortgage Investment’s board and the CEO’s back ground.
- 3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.