Important news for shareholders and potential investors in Agree Realty Corporation (NYSE:ADC): The dividend payment of US$0.54 per share will be distributed into shareholder on 13 July 2018, and the stock will begin trading ex-dividend at an earlier date, 28 June 2018. Is this future income a persuasive enough catalyst for investors to think about Agree Realty 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 Agree Realty
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?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- 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 Agree Realty 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 ADC is 98.55%, which is in-line with most other REIT stocks. Going forward, analysts expect ADC’s payout to increase to 132.48% of its earnings, which leads to a dividend yield of 4.09%. However, EPS is forecasted to fall to $1.67 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although ADC’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time.In terms of its peers, Agree Realty produces a yield of 4.02%, which is on the low-side for REITs stocks.
If you are building an income portfolio, then Agree Realty is a complicated choice since it has some positive aspects as well as negative ones. 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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three pertinent aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for ADC’s future growth? Take a look at our free research report of analyst consensus for ADC’s outlook.
- Valuation: What is ADC 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 ADC 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.