Yahoo Finance Dream Global Real Estate Investment Trust (TSE:DRG.UN) Will Pay A 0.5% Dividend In 3 Days
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Dream Global Real Estate Investment Trust (TSE:DRG.UN) is about to trade ex-dividend in the next 3 days. You can purchase shares before the 30th of July in order to receive the dividend, which the company will pay on the 15th of August.
Dream Global Real Estate Investment Trust's next dividend payment will be CA$0.067 per share, on the back of last year when the company paid a total of CA$0.80 to shareholders. Looking at the last 12 months of distributions, Dream Global Real Estate Investment Trust has a trailing yield of approximately 5.7% on its current stock price of CA$14.13. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.
See our latest analysis for Dream Global Real Estate Investment Trust
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Dream Global Real Estate Investment Trust is paying out an acceptable 62% of its profit, a common payout level among most companies. That said, REITs are often required by law to distribute all of their earnings, and it's not unusual to see a REIT with a payout ratio around 100%. We wouldn't read too much into this. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out 85% of its free cash flow as dividends, which is within usual limits but will limit the company's ability to lift the dividend if there's no growth.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see Dream Global Real Estate Investment Trust's earnings have been skyrocketing, up 78% per annum for the past five years.
We'd also point out that Dream Global Real Estate Investment Trust issued a meaningful number of new shares in the past year. It's hard to grow dividends per share when a company keeps creating new shares.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Dream Global Real Estate Investment Trust's dividend payments are broadly unchanged compared to where they were eight years ago.
To Sum It Up
Should investors buy Dream Global Real Estate Investment Trust for the upcoming dividend? It's good to see earnings are growing, since all of the best dividend stocks grow their earnings meaningfully over the long run. However, we'd also note that Dream Global Real Estate Investment Trust is paying out more than half of its earnings and cash flow as profits, which could limit the dividend growth if earnings growth slows. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Dream Global Real Estate Investment Trust's dividend merits.
Wondering what the future holds for Dream Global Real Estate Investment Trust? See what the three analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
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.
