Have you been keeping an eye on Safety Income & Growth Inc’s (NYSE:SAFE) upcoming dividend of $0.15 per share payable on the 16 January 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 28 December 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Safety Income & Growth’s latest financial data to analyse its dividend characteristics. View our latest analysis for Safety Income & Growth
Here’s how I find good dividend stocks
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- 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 the amount of dividend per share grown over the past?
- Is is able 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 Safety Income & Growth fare?The company currently pays out more than double of its earnings as a dividend, which suggests that the dividend is not well-covered by earnings by any means. 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’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Safety Income & Growth as a dividend investment. Last year was the company’s first dividend payment, so it is certainly early days. The standard practice for reliable payers is to look for 10 or so years of track record. Relative to peers, Safety Income & Growth has a yield of 3.42%, which is on the low-side for reits stocks.
What this means for you:
Are you a shareholder? You may be wondering why Safety Income & Growth is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be beneficial exploring other dividend stocks as alternatives to Safety Income & Growth or even look at high-growth stocks to supplement your steady income stocks. I recommend 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 Safety Income & Growth 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. Take a look at our latest free fundmental analysis to explore other aspects of Safety Income & Growth.