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Attention dividend hunters! Ajisen (China) Holdings Limited (SEHK:538) will be distributing its dividend of CN¥0.05 per share on the 28 September 2018, and will start trading ex-dividend in 2 days time on the 25 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Ajisen (China) Holdings’s latest financial data to analyse its dividend attributes. View our latest analysis for Ajisen (China) Holdings
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is its annual yield among the top 25% of dividend-paying companies?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has dividend per share amount increased over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Ajisen (China) Holdings pass our checks?
The current payout ratio for 538 is negative, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. 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. Although 538’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. Compared to its peers, Ajisen (China) Holdings produces a yield of 2.17%, which is on the low-side for Hospitality stocks.
Next Steps:
Taking all the above into account, Ajisen (China) Holdings is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three key factors you should further research:
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Future Outlook: What are well-informed industry analysts predicting for 538’s future growth? Take a look at our free research report of analyst consensus for 538’s outlook.
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Valuation: What is 538 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 538 is currently mispriced by the market.
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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.