If you are interested in cashing in on Challenger Technologies Limited’s (SGX:573) upcoming dividend of S$0.011 per share, you only have 2 days left to buy the shares before its ex-dividend date, 10 August 2018, in time for dividends payable on the 24 August 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Challenger Technologies’s latest financial data to analyse its dividend characteristics.

Check out our latest analysis for Challenger Technologies

How I analyze a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is its annual yield among the top 25% of dividend-paying companies?

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

• Has dividend per share amount increased over the past?

• 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?

How well does Challenger Technologies fit our criteria?

Challenger Technologies has a trailing twelve-month payout ratio of 41.41%, meaning the dividend is sufficiently 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. Although 573’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.

Relative to peers, Challenger Technologies generates a yield of 6.73%, which is high for Specialty Retail stocks.

Next Steps:

With this in mind, I definitely rank Challenger Technologies as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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. There are three relevant factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 573’s future growth? Take a look at our free research report of analyst consensus for 573’s outlook.

2. Valuation: What is 573 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 573 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.