Is Land Securities Group plc (LON:LAND) A Smart Choice For Dividend Investors?

A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Land Securities Group plc (LON:LAND) has returned to shareholders over the past 10 years, an average dividend yield of 4.00% annually. Does Land Securities Group tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Land Securities Group

5 checks you should do on a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

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

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share amount increased over the past?

• Is is able to pay the current rate of dividends from its earnings?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

LSE:LAND Historical Dividend Yield June 26th 18

How does Land Securities Group fare?

Land Securities Group has a negative payout ratio, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings.

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 Land Securities Group 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.

Compared to its peers, Land Securities Group produces a yield of 4.64%, which is high for REITs stocks.

Next Steps:

If Land Securities Group 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 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 essential aspects you should further examine:

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

2. Valuation: What is LAND 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 LAND 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.