Yahoo Finance Is Mapletree Industrial Trust (SGX:ME8U) An Attractive Dividend Stock?
Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Over the past 7 years, Mapletree Industrial Trust (SGX:ME8U) has returned an average of 7.00% per year to shareholders in terms of dividend yield. Let’s dig deeper into whether Mapletree Industrial Trust should have a place in your portfolio. View out our latest analysis for Mapletree Industrial Trust
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it the top 25% annual dividend yield payer?
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?
Will it be able to continue to payout at the current rate in the future?
How does Mapletree Industrial Trust fare?
The company currently pays out 71.80% of its earnings as a dividend, according to its trailing twelve-month data, 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 100.67%, leading to a dividend yield of around 6.75%. However, EPS is forecasted to fall to SGD0.13 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. This also brings 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 Mapletree Industrial Trust as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Mapletree Industrial Trust has a yield of 6.18%, which is on the low-side for REITs stocks.
Next Steps:
Whilst there are few things you may like about Mapletree Industrial Trust from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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. I’ve put together three key aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for ME8U’s future growth? Take a look at our free research report of analyst consensus for ME8U’s outlook.
Valuation: What is ME8U 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 ME8U 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.
