Shares of Nam Tai Property Inc (NYSE:NTP) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.07 per share, investors must have owned the shares prior to 28 December 2017, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. What does this mean for current shareholders and potential investors? Below, I will explain how holding Nam Tai Property can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Nam Tai Property
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it the top 25% annual dividend yield payer?
- 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?
How well does Nam Tai Property fit our criteria?Nam Tai Property has a payout ratio of more than 200% of earnings, meaning that the dividend is predominantly funded by retained 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 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 Nam Tai Property 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. Relative to peers, Nam Tai Property has a yield of 2.29%, which is on the low-side for real estate stocks.
What this means for you:
Are you a shareholder? You may be wondering why Nam Tai Property is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be valuable exploring other income stocks as alternatives to Nam Tai Property or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing 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? Now you know to keep in mind the reason why investors should be careful investing in Nam Tai Property 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. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Check our latest free fundmental analysis to explore other aspects of Nam Tai Property.