Yahoo Movies Read This Before Buying Apple Hospitality REIT Inc (NYSE:APLE) For Its Upcoming US$0.10 Dividend
If you are interested in cashing in on Apple Hospitality REIT Inc’s (NYSE:APLE) upcoming dividend of US$0.10 per share, you only have 2 days left to buy the shares before its ex-dividend date, 29 June 2018, in time for dividends payable on the 16 July 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Apple Hospitality REIT’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Apple Hospitality REIT
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is their annual yield among the top 25% 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 is able to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
How well does Apple Hospitality REIT fit our criteria?
REITs are a special-case dividend payer. This is because a high percentage of their earnings are required to be paid out as dividends. The company currently pays out 142.12% of its earnings as a dividend, according to its trailing twelve-month data, meaning that a portion of dividend payments are funded by retained earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
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 Apple Hospitality REIT 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, Apple Hospitality REIT generates a yield of 6.50%, which is high for REITs stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Apple Hospitality REIT 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 fundamental factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for APLE’s future growth? Take a look at our free research report of analyst consensus for APLE’s outlook.
Valuation: What is APLE 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 APLE 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.
