Attention dividend hunters! Arbor Realty Trust Inc (NYSE:ABR) will be distributing its dividend of $0.25 per share on the 31 May 2018, and will start trading ex-dividend in 3 days time on the 14 May 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Arbor Realty Trust can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Arbor Realty Trust
5 questions to ask before buying a dividend stock
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 paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share risen in the past couple of years?
- 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 Arbor Realty Trust fare?Arbor Realty Trust has a trailing twelve-month payout ratio of 62.54%, 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 95.55%, leading to a dividend yield of around 10.42%. In addition to this, EPS should increase to $1.34. 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 Arbor Realty Trust have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends. In terms of its peers, Arbor Realty Trust generates a yield of 8.87%, which is on the low-side for Mortgage REITs stocks.
If Arbor Realty Trust is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer 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 important factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for ABR’s future growth? Take a look at our free research report of analyst consensus for ABR’s outlook.
- Valuation: What is ABR 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 ABR is currently mispriced by the market.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.