Have you been keeping an eye on MFA Financial Inc’s (NYSE:MFA) upcoming dividend of $0.2 per share payable on the 31 January 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 27 December 2017. 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 MFA Financial’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for MFA Financial
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
- Is it paying an annual yield above 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has it increased its dividend per share amount 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 MFA Financial pass our checks?MFA Financial has a payout ratio of 109.54%, meaning the dividend is not sufficiently covered by its earnings. Going forward, analysts expect MFA’s payout to remain around the same level at 111.37% of its earnings, which leads to a dividend yield of around 9.91%. Moreover, EPS should increase to $0.74. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Although MFA’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Compared to its peers, MFA Financial has a yield of 9.91%, which is high for mortgage reits stocks.
What this means for you:
Are you a shareholder? If MFA Financial is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be valuable exploring other income stocks as alternatives to MFA Financial or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking all the above into account, MFA Financial is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. As with all investments, 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. Dig deeping in our latest free fundmental analysis to explore other aspects of MFA Financial.