2 Days Left To Cash In On Mesa Royalty Trust (NYSE:MTR) Dividend, Should You Buy?

Shares of Mesa Royalty Trust (NYSE:MTR) will begin trading ex-dividend in 2 days. To qualify for the dividend check of US$0.078 per share, investors must have owned the shares prior to 28 June 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Mesa Royalty Trust and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View out our latest analysis for Mesa Royalty Trust

5 questions I ask before picking a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is their annual yield among the top 25% of dividend payers?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has dividend per share risen in the past couple of years?

• Can it afford 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?

NYSE:MTR Historical Dividend Yield June 25th 18

How well does Mesa Royalty Trust fit our criteria?

The company currently pays out 100.93% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its 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.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Not only have dividend payouts from Mesa Royalty Trust fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.

Relative to peers, Mesa Royalty Trust has a yield of 9.03%, which is high for Oil and Gas stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in Mesa Royalty Trust 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. Below, I’ve compiled three relevant aspects you should further examine:

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

2. Valuation: What is MTR 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 MTR 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.