Important news for shareholders and potential investors in AMVIG Holdings Limited (HKG:2300): The dividend payment of HK$0.08 per share will be distributed to shareholders on 14 December 2018, and the stock will begin trading ex-dividend at an earlier date, 03 December 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine AMVIG Holdings’s latest financial data to analyse its dividend characteristics.

See our latest analysis for AMVIG Holdings

5 checks you should do on a dividend stock

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

• Is it the top 25% annual dividend yield payer?

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

• Has it increased its dividend per share amount over the past?

• Is is able to pay the current rate of dividends from its earnings?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

Does AMVIG Holdings pass our checks?

The current trailing twelve-month payout ratio for the stock is 43%, 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.

If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.

If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Not only have dividend payouts from AMVIG Holdings fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.

Compared to its peers, AMVIG Holdings has a yield of 7.7%, which is high for Packaging stocks.

Next Steps:

If you are building an income portfolio, then AMVIG Holdings is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. Below, I’ve compiled three key aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 2300’s future growth? Take a look at our free research report of analyst consensus for 2300’s outlook.

2. Valuation: What is 2300 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 2300 is currently mispriced by the market.

3. 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.