Read This Before Buying Centuria Metropolitan REIT (ASX:CMA) For Its Upcoming AU$0.045 Dividend

If you are interested in cashing in on Centuria Metropolitan REIT’s (ASX:CMA) upcoming dividend of AU$0.045 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 July 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Centuria Metropolitan REIT’s latest financial data to analyse its dividend attributes. See our latest analysis for Centuria Metropolitan REIT

Here’s how I find good dividend stocks

When researching a dividend stock, I always follow the following screening criteria:

• Does it pay an annual yield higher than 75% of dividend payers?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has the amount of dividend per share grown 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?

ASX:CMA Historical Dividend Yield June 25th 18

How well does Centuria Metropolitan REIT fit our criteria?

Centuria Metropolitan REIT has a trailing twelve-month payout ratio of 56.59%, 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 71.47%, leading to a dividend yield of around 7.58%. However, EPS is forecasted to fall to A$0.23 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. The reality is that it is too early to consider Centuria Metropolitan REIT as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Centuria Metropolitan REIT produces a yield of 7.45%, which is high for REITs stocks.

Next Steps:

Considering the dividend attributes we analyzed above, Centuria Metropolitan REIT is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 important factors you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for CMA’s future growth? Take a look at our free research report of analyst consensus for CMA’s outlook.

2. Valuation: What is CMA 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 CMA is currently mispriced by the market.

3. Other 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.