Cross Timbers Royalty Trust (NYSE:CRT): What You Have To Know Before Buying For The Upcoming Dividend

Shares of Cross Timbers Royalty Trust (NYSE:CRT) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.09 per share, investors must have owned the shares prior to 28 March 2018, which is the last day the company's management will finalize their list of shareholders to which they will send dividend payments. Is this future income a persuasive enough catalyst for investors to think about Cross Timbers Royalty Trust as an investment today? Below, I'm going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for Cross Timbers Royalty Trust

5 checks you should do on 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 consistently paid a stable dividend without missing a payment or drastically cutting payout?
• Has dividend per share amount increased over the past?
• Can it afford to pay the current rate of dividends from its earnings?
• Will it be able to continue to payout at the current rate in the future?

How does Cross Timbers Royalty Trust fare?

The current trailing twelve-month payout ratio for CRT is 100.00%, meaning the dividend is not sufficiently covered by its earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. 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 Cross Timbers Royalty Trust fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. 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, Cross Timbers Royalty Trust produces a yield of 7.53%, which is high for Oil and Gas stocks.

Next Steps:

After digging a little deeper into Cross Timbers Royalty Trust's yield, it's easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering 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 aspects you should look at:

1. Valuation: What is CRT 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 CRT is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cross Timbers Royalty Trust’s board and the CEO’s back ground.
3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.