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Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. In the past 10 years China Resources Land Limited (SEHK:1109) has returned an average of 2.00% per year to investors in the form of dividend payouts. Let’s dig deeper into whether China Resources Land should have a place in your portfolio. See our latest analysis for China Resources Land
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is their annual yield among the top 25% of dividend payers?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has it increased its dividend per share amount over the past?
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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 well does China Resources Land fit our criteria?
The company currently pays out 29.09% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 29.36%, leading to a dividend yield of around 3.80%. Moreover, EPS should increase to HK$3.2. 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. Compared to its peers, China Resources Land generates a yield of 2.58%, which is on the low-side for Real Estate stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank China Resources Land as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 factors you should further examine:
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1. Future Outlook: What are well-informed industry analysts predicting for 1109’s future growth? Take a look at our free research report of analyst consensus for 1109’s outlook.
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2. Valuation: What is 1109 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 1109 is currently mispriced by the market.
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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.