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Important news for shareholders and potential investors in Asia Allied Infrastructure Holdings Limited (HKG:711): The dividend payment of HK$0.011 per share will be distributed into shareholder on 18 September 2018, and the stock will begin trading ex-dividend at an earlier date, 28 August 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 Asia Allied Infrastructure Holdings’s most recent financial data to examine its dividend characteristics in more detail.
View our latest analysis for Asia Allied Infrastructure Holdings
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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Does it pay an annual yield higher than 75% of dividend payers?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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Has dividend per share risen in the past couple of years?
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Is its earnings sufficient to payout dividend at the current rate?
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Will it have the ability to keep paying its dividends going forward?
How does Asia Allied Infrastructure Holdings fare?
The current trailing twelve-month payout ratio for the stock is 26.3%, 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.
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. Dividend payments from Asia Allied Infrastructure Holdings have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends.
Compared to its peers, Asia Allied Infrastructure Holdings generates a yield of 2.7%, which is on the low-side for Construction stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Asia Allied Infrastructure Holdings 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 pertinent aspects you should further examine: