In This Article:
Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Hotel Grand Central Limited (SGX:H18) has returned to shareholders over the past 10 years, an average dividend yield of 4.00% annually. Let’s dig deeper into whether Hotel Grand Central should have a place in your portfolio. View our latest analysis for Hotel Grand Central
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
-
Is it the top 25% annual dividend yield payer?
-
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
-
Has the amount of dividend per share grown over the past?
-
Does earnings amply cover its dividend payments?
-
Will it be able to continue to payout at the current rate in the future?
Does Hotel Grand Central pass our checks?
The company currently pays out 87.97% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Although H18’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. Relative to peers, Hotel Grand Central has a yield of 5.13%, which is high for Hospitality stocks.
Next Steps:
With this in mind, I definitely rank Hotel Grand Central 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 recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three pertinent aspects you should further examine:
-
Valuation: What is H18 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 H18 is currently mispriced by the market.
-
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Hotel Grand Central’s board and the CEO’s back ground.
-
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.