Yahoo Finance Is Oxley Holdings Limited (SGX:5UX) A Smart Pick For Income Investors?
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Oxley Holdings Limited (SGX:5UX) has returned to shareholders over the past 7 years, an average dividend yield of 2.00% annually. Does Oxley Holdings tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Oxley Holdings
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Is it able to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How well does Oxley Holdings fit our criteria?
The company currently pays out 23.20% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect 5UX’s payout to fall to 20.79% of its earnings, which leads to a dividend yield of 2.96%. However, EPS should increase to SGD0.05, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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 Oxley Holdings 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. Relative to peers, Oxley Holdings generates a yield of 2.59%, which is on the low-side for Real Estate stocks.
Next Steps:
Taking all the above into account, Oxley Holdings is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. Below, I’ve compiled three essential aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for 5UX’s future growth? Take a look at our free research report of analyst consensus for 5UX’s outlook.
Valuation: What is 5UX 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 5UX 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.