Should Income Investors Buy Assura Plc (LON:AGR) Before Its Ex-Dividend?

Shares of Assura Plc (LON:AGR) will begin trading ex-dividend in 5 days. To qualify for the dividend check of £0.0066 per share, investors must have owned the shares prior to 14 June 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. What does this mean for current shareholders and potential investors? Below, I will explain how holding Assura can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View out our latest analysis for Assura

5 checks you should do on a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

  • Is it paying an annual yield above 75% of dividend payers?
  • Has it paid dividend every year without dramatically reducing payout in the past?
  • Has dividend per share risen in the past couple of years?
  • Does earnings amply cover its dividend payments?
  • Will it have the ability to keep paying its dividends going forward?

LSE:AGR Historical Dividend Yield June 8th 18
LSE:AGR Historical Dividend Yield June 8th 18

How well does Assura fit our criteria?

The company currently pays out 68.65% of its earnings as a dividend, according to its trailing twelve-month data, which is rather low compared to other REITs. Generally, REITs are expected to pay out the majority of its earnings to provide a regular income stream for their investors. In the near future, analysts are predicting a higher payout ratio of 92.84%, leading to a dividend yield of 4.79%. In addition to this, EPS should increase to £0.064. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. However this does bring about uncertainty around the sustainability of the payout ratio. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from Assura have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, Assura has a yield of 4.52%, which is high for REITs stocks.

Next Steps:

Considering the dividend attributes we analyzed above, Assura is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 important aspects you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for AGR’s future growth? Take a look at our free research report of analyst consensus for AGR’s outlook.
  2. Valuation: What is AGR 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 AGR is currently mispriced by the market.
  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.