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Have you been keeping an eye on Television Broadcasts Limited’s (SEHK:511) upcoming dividend of HK$1 per share payable on the 12 June 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 25 May 2018. Should you diversify into Television Broadcasts and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for Television Broadcasts
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is its annual yield among the top 25% of dividend-paying companies?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has dividend per share risen in the past couple of years?
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Is its earnings sufficient to payout dividend at the current rate?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Television Broadcasts fare?
511 currently pays out twice what it is earning, according to its trailing twelve-month data, which suggests that the dividend is not well-covered by earnings by any means. However, going forward, analysts expect 511’s payout to fall into a more sustainable range of 76.88% of its earnings, which leads to a dividend yield of 4.74%. In addition to this, EPS should increase to HK$1.13, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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 Television Broadcasts fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Compared to its peers, Television Broadcasts produces a yield of 4.53%, which is high for Media stocks.
Next Steps:
Whilst there are few things you may like about Television Broadcasts from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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 recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three fundamental factors you should look at: