Important news for shareholders and potential investors in China Mobile Limited (SEHK:941): The dividend payment of CN¥1.58 per share will be distributed into shareholder on 27 June 2018, and the stock will begin trading ex-dividend at an earlier date, 24 May 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding China Mobile can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for China Mobile

5 questions I ask before picking a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is its annual yield among the top 25% of dividend payers?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has dividend per share risen in the past couple of years?

• Is it able to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

Does China Mobile pass our checks?

China Mobile has a trailing twelve-month payout ratio of 48.51%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 941’s payout to remain around the same level at 51.55% of its earnings, which leads to a dividend yield of around 4.84%. Furthermore, EPS should increase to CN¥5.69. 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. Although 941’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. Compared to its peers, China Mobile produces a yield of 4.37%, which is high for Wireless Telecom stocks.

Next Steps:

With this in mind, I definitely rank China Mobile as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their 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 pertinent aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for 941’s future growth? Take a look at our free research report of analyst consensus for 941’s outlook.

2. Valuation: What is 941 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 941 is currently mispriced by the market.

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.