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If you are interested in cashing in on China Everbright Limited’s (SEHK:165) upcoming dividend of HK$0.6 per share, you only have 2 days left to buy the shares before its ex-dividend date, 06 June 2018, in time for dividends payable on the 21 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into China Everbright’s latest financial data to analyse its dividend attributes. See our latest analysis for China Everbright

5 questions I ask before picking 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 payers?

• Does it consistently pay out dividends without missing a payment or significantly cutting payout?

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

• Does earnings amply cover its dividend payments?

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

Does China Everbright pass our checks?

The current trailing twelve-month payout ratio for the stock is 36.35%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 24.78%, leading to a dividend yield of 5.47%.

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. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. In terms of its peers, China Everbright generates a yield of 4.93%, which is high for Capital Markets stocks.

Next Steps:

Considering the dividend attributes we analyzed above, China Everbright is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 essential factors you should look at:

1. Valuation: What is 165 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 165 is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on China Everbright’s board and the CEO’s back ground.

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 pass 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.