Should Income Investors Buy Seritage Growth Properties (NYSE:SRG) Before Its Ex-Dividend?

Attention dividend hunters! Seritage Growth Properties (NYSE:SRG) will be distributing its dividend of $0.25 per share on the 12 April 2018, and will start trading ex-dividend in 3 days time on the 28 March 2018. 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 Seritage Growth Properties’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Seritage Growth Properties

How I analyze a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

  • 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 the company be able to keep paying dividend based on the future earnings growth?

NYSE:SRG Historical Dividend Yield Mar 24th 18
NYSE:SRG Historical Dividend Yield Mar 24th 18

How does Seritage Growth Properties fare?

Seritage Growth Properties has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. 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 Seritage Growth Properties as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Seritage Growth Properties generates a yield of 2.87%, which is on the low-side for REITs stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in Seritage Growth Properties for the dividend. 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 essential aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for SRG’s future growth? Take a look at our free research report of analyst consensus for SRG’s outlook.
  2. Valuation: What is SRG 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 SRG is currently mispriced by the market.
  3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.