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Have you been keeping an eye on Henderson Land Development Company Limited’s (HKG:12) upcoming dividend of HK$0.50 per share payable on the 18 September 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 05 September 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Henderson Land Development’s most recent financial data to examine its dividend characteristics in more detail.
Check out our latest analysis for Henderson Land Development
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is it paying an annual yield above 75% of dividend payers?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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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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Will it be able to continue to payout at the current rate in the future?
Does Henderson Land Development pass our checks?
The company currently pays out 22.0% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 12’s payout to increase to 50.3% of its earnings, which leads to a dividend yield of 4.3%. However, EPS is forecasted to fall to HK$4.19 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
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. Shareholders would have seen a few years of reduced payments in this time.
Relative to peers, Henderson Land Development generates a yield of 4.2%, which is high for Real Estate stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, Henderson Land Development ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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 fundamental aspects you should further examine: