On the 21 September 2018, Lifestyle International Holdings Limited (HKG:1212) will be paying shareholders an upcoming dividend amount of HK$0.29 per share. However, investors must have bought the company’s stock before 06 September 2018 in order to qualify for the payment. That means you have only 2 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Lifestyle International Holdings’s latest financial data to analyse its dividend attributes.

See our latest analysis for Lifestyle International Holdings

5 checks you should use to assess a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

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

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has dividend per share amount increased over the past?

• Does earnings amply cover its dividend payments?

• Will the company be able to keep paying dividend based on the future earnings growth?

How well does Lifestyle International Holdings fit our criteria?

The current trailing twelve-month payout ratio for the stock is 41.5%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 1212’s payout to increase to 51.3% of its earnings, which leads to a dividend yield of around 4.3%. However, EPS is forecasted to fall to HK$1.22 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.

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 1212’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

Compared to its peers, Lifestyle International Holdings generates a yield of 4.2%, which is on the low-side for Multiline Retail stocks.

Next Steps:

Taking into account the dividend metrics, Lifestyle International Holdings ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three relevant aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for 1212’s future growth? Take a look at our free research report of analyst consensus for 1212’s outlook.

2. Valuation: What is 1212 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 1212 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.