Shares of Argosy Property Limited (NZSE:ARG) will begin trading ex-dividend in 5 days. To qualify for the dividend check of NZ$0.02 per share, investors must have owned the shares prior to 13 March 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 Argosy Property can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for Argosy Property
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share amount increased over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
Does Argosy Property pass our checks?Argosy Property has a trailing twelve-month payout ratio of 70.55%, 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. Going forward, analysts expect ARG’s payout to increase to 91.32% of its earnings, which leads to a dividend yield of 5.98%. However, EPS is forecasted to fall to NZ$0.07 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. This also brings about uncertainty around the sustainability of the payout ratio. 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 Argosy Property 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. In terms of its peers, Argosy Property produces a yield of 5.99%, which is high for REITs stocks.
With this in mind, I definitely rank Argosy Property as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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 key aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for ARG’s future growth? Take a look at our free research report of analyst consensus for ARG’s outlook.
- Valuation: What is ARG 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 ARG is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.