On the 16 July 2018, Blackstone Mortgage Trust Inc (NYSE:BXMT) will be paying shareholders an upcoming dividend amount of US$0.62 per share. However, investors must have bought the company’s stock before 28 June 2018 in order to qualify for the payment. That means you have only 1 days left! 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 Blackstone Mortgage Trust’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Blackstone Mortgage Trust
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share risen in the past couple of years?
- Is is able to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does Blackstone Mortgage Trust pass our checks?
REITs are a special-case dividend payer. This is because a high percentage of their earnings are required to be paid out as dividends. The current trailing twelve-month payout ratio for BXMT is 108.41%, meaning that a portion of dividend payments are funded by retained earnings. However, going forward, analysts expect BXMT’s payout to fall into a more sustainable range of 91.80% of its earnings, which leads to a dividend yield of around 7.68%. Moreover, EPS should increase to $2.39, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
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 Blackstone Mortgage Trust 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.Relative to peers, Blackstone Mortgage Trust generates a yield of 7.59%, which is on the low-side for Mortgage REITs stocks.
Now you know to keep in mind the reason why investors should be careful investing in Blackstone Mortgage Trust for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. Below, I’ve compiled three relevant factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for BXMT’s future growth? Take a look at our free research report of analyst consensus for BXMT’s outlook.
- Valuation: What is BXMT 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 BXMT 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.