Investors who want to cash in on Reitmans (Canada) Limited’s (TSX:RET.A) upcoming dividend of CA$0.05 per share have only 3 days left to buy the shares before its ex-dividend date, 13 April 2018, in time for dividends payable on the 26 April 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 Reitmans (Canada)’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Reitmans (Canada)
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- 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 the amount of dividend per share grown over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it be able to continue to payout at the current rate in the future?
Does Reitmans (Canada) pass our checks?
Reitmans (Canada) has a negative payout ratio, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. 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 Reitmans (Canada) fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Compared to its peers, Reitmans (Canada) generates a yield of 4.91%, which is high for Specialty Retail stocks.Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Reitmans (Canada) 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, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three essential aspects you should further examine:
- Historical Performance: What has RET.A’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Reitmans (Canada)’s board and the CEO’s back ground.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.