Yahoo Finance St. Modwen Properties PLC (LON:SMP): Ex-Dividend Is In 4 Days
Have you been keeping an eye on St. Modwen Properties PLC’s (LON:SMP) upcoming dividend of UK£0.04 per share payable on the 04 April 2019? Then you only have 4 days left before the stock starts trading ex-dividend on the 07 March 2019. Is this future income a persuasive enough catalyst for investors to think about St. Modwen Properties as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
View our latest analysis for St. Modwen Properties
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
Has it paid dividend every year without dramatically reducing payout in the past?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does St. Modwen Properties fit our criteria?
The company currently pays out 26% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 50% which, assuming the share price stays the same, leads to a dividend yield of 2.4%. Moreover, EPS should increase to £0.38. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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 St. Modwen Properties as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Relative to peers, St. Modwen Properties generates a yield of 1.7%, which is on the low-side for Real Estate stocks.
Next Steps:
After digging a little deeper into St. Modwen Properties’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. 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. There are three pertinent factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for SMP’s future growth? Take a look at our free research report of analyst consensus for SMP’s outlook.
Valuation: What is SMP 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 SMP 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
