Is Accordia Golf Trust (SGX:ADQU) A Smart Choice For Dividend Investors?

A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Accordia Golf Trust (SGX:ADQU) has returned to shareholders over the past 3 years, an average dividend yield of 8.00% annually. Let’s dig deeper into whether Accordia Golf Trust should have a place in your portfolio. View out our latest analysis for Accordia Golf Trust

5 questions I ask before picking a dividend stock

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

• Is it paying an annual yield above 75% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• 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?

SGX:ADQU Historical Dividend Yield June 22nd 18

How does Accordia Golf Trust fare?

The company currently pays out 84.01% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 104.76%, leading to a dividend yield of around 8.57%. Moreover, EPS should increase to ¥4.92. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. However this does bring about uncertainty around the sustainability of the payout ratio.

Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Unfortunately, it is really too early to view Accordia Golf Trust as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Accordia Golf Trust has a yield of 6.42%, which is high for Hospitality stocks.

Next Steps:

If you are building an income portfolio, then Accordia Golf Trust is a complicated choice since it has some positive aspects as well as negative ones. 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. Below, I’ve compiled three pertinent aspects you should further research:

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

2. Valuation: What is ADQU 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 ADQU 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.

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.