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On the 14 September 2018, China Lilang Limited (HKG:1234) will be paying shareholders an upcoming dividend amount of CN¥0.23 per share. However, investors must have bought the company’s stock before 28 August 2018 in order to qualify for the payment. That means you have only 2 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding China Lilang can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
View our latest analysis for China Lilang
5 questions to ask before buying a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is it paying an annual yield above 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 the amount of dividend per share grown over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will it have the ability to keep paying its dividends going forward?
How well does China Lilang fit our criteria?
The current trailing twelve-month payout ratio for the stock is 49.3%, which means that the dividend is covered by earnings. Going forward, analysts expect 1234’s payout to increase to 73.0% of its earnings, which leads to a dividend yield of around 7.1%. Furthermore, EPS should increase to CN¥0.71. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider China Lilang as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, China Lilang produces a yield of 5.5%, which is high for Luxury stocks.
Next Steps:
Considering the dividend attributes we analyzed above, China Lilang 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. I’ve put together three essential aspects you should further research:
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Future Outlook: What are well-informed industry analysts predicting for 1234’s future growth? Take a look at our free research report of analyst consensus for 1234’s outlook.
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Valuation: What is 1234 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 1234 is currently mispriced by the market.
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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 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.