The Keg Royalties Income Fund (TSE:KEG.UN): 2 Days To Buy Before The Ex-Dividend Date

If you are interested in cashing in on The Keg Royalties Income Fund’s (TSE:KEG.UN) upcoming dividend of CA$0.095 per share, you only have 2 days left to buy the shares before its ex-dividend date, 20 September 2018, in time for dividends payable on the 28 September 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 Keg Royalties Income Fund’s most recent financial data to examine its dividend characteristics in more detail.

Check out our latest analysis for Keg Royalties Income Fund

Here’s how I find good dividend stocks

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 its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has dividend per share amount increased over the past?

• Does earnings amply cover its dividend payments?

• Will it be able to continue to payout at the current rate in the future?

TSX:KEG.UN Historical Dividend Yield September 17th 18

Does Keg Royalties Income Fund pass our checks?

The current trailing twelve-month payout ratio for the stock is 40.8%, which means that the dividend is covered by 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.

When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

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. KEG.UN investors will be well aware there has not been any increase in the dividend payments over the last 10 years, although the payments have at least been steady. Though this may not be a serious red flag, strong dividend stocks should always strive to increase its payout over time.

Relative to peers, Keg Royalties Income Fund has a yield of 6.7%, which is high for Hospitality stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Keg Royalties Income Fund as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 important aspects you should further research:

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

2. Valuation: What is KEG.UN 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 KEG.UN is currently mispriced by the market.

3. Other 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.