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Investors who want to cash in on China Travel International Investment Hong Kong Limited’s (HKG:308) upcoming dividend of HK$0.03 per share have only 2 days left to buy the shares before its ex-dividend date, 05 September 2018, in time for dividends payable on the 27 September 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding China Travel International Investment Hong Kong can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.

See our latest analysis for China Travel International Investment Hong Kong

5 checks you should use to assess 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 paid dividend every year without dramatically reducing payout in the past?

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

• Can it afford 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 China Travel International Investment Hong Kong pass our checks?

China Travel International Investment Hong Kong has a trailing twelve-month payout ratio of 40.2%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 45.7%, leading to a dividend yield of 4.3%. However, EPS is forecasted to fall to HK$0.20 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.

Compared to its peers, China Travel International Investment Hong Kong has a yield of 3.3%, which is high for Hospitality stocks but still below the market’s top dividend payers.

Next Steps:

Keeping in mind the dividend characteristics above, China Travel International Investment Hong Kong is definitely worth considering for investors looking to build a dedicated income 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 fundamental factors you should further examine: