Yahoo Finance 2 Days Left Before Investa Office Fund (ASX:IOF) Will Start Trading Ex-Dividend, Is It Worth Buying?
If you are interested in cashing in on Investa Office Fund’s (ASX:IOF) upcoming dividend of AU$0.10 per share, you only have 2 days left to buy the shares before its ex-dividend date, 28 June 2018, in time for dividends payable on the 27 August 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Investa Office Fund can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for Investa Office Fund
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Does it pay an annual yield higher than 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Investa Office Fund fit our criteria?
The current trailing twelve-month payout ratio for the stock is 31.12%, which is rather low compared to other REITs. Generally, REITs are expected to pay out the majority of its earnings to provide a regular income stream for their investors. In the near future, analysts are predicting a higher payout ratio of 81.55%, leading to a dividend yield of 3.96%. However, EPS is forecasted to fall to A$0.30 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
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. Dividend payments from Investa Office Fund 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.
In terms of its peers, Investa Office Fund generates a yield of 3.87%, which is on the low-side for REITs stocks.
Next Steps:
If Investa Office Fund is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three fundamental aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for IOF’s future growth? Take a look at our free research report of analyst consensus for IOF’s outlook.
Valuation: What is IOF 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 IOF 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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
