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Have you been keeping an eye on Tianyun International Holdings Limited’s (SEHK:6836) upcoming dividend of CN¥0.03 per share payable on the 25 June 2018? Then you only have 8 days left before the stock starts trading ex-dividend on the 28 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Tianyun International Holdings’s latest financial data to analyse its dividend attributes. View our latest analysis for Tianyun International Holdings
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Does it pay an annual yield higher than 75% of dividend payers?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has it increased its dividend per share amount over the past?
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Can it afford to pay the current rate of dividends from its earnings?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Tianyun International Holdings pass our checks?
The current trailing twelve-month payout ratio for the stock is 27.73%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 6836’s payout to remain around the same level at 28.05% of its earnings, which leads to a dividend yield of around 5.14%. Moreover, EPS should increase to CN¥0.16. 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. Unfortunately, it is really too early to view Tianyun International Holdings as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Tianyun International Holdings generates a yield of 3.16%, which is high for Food stocks but still below the market’s top dividend payers.
Next Steps:
Taking all the above into account, Tianyun International Holdings is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three pertinent aspects you should further research: