Have you been keeping an eye on Haitong International Securities Group Limited’s (HKG:665) upcoming dividend of HK$0.076 per share payable on the 24 October 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 06 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Haitong International Securities Group’s latest financial data to analyse its dividend attributes.

View our latest analysis for Haitong International Securities Group

5 checks you should use to assess a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is it the top 25% annual dividend yield payer?

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

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

• Does earnings amply cover its dividend payments?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

Does Haitong International Securities Group pass our checks?

Haitong International Securities Group has a trailing twelve-month payout ratio of 49.1%, which means that the dividend is covered by earnings. Going forward, analysts expect 665’s payout to remain around the same level at 48.0% of its earnings, which leads to a dividend yield of 8.5%. Furthermore, EPS is forecasted to fall to HK$0.41 in the upcoming year.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Haitong International Securities Group fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.

Compared to its peers, Haitong International Securities Group produces a yield of 8.6%, which is high for Capital Markets stocks.

Next Steps:

Considering the dividend attributes we analyzed above, Haitong International Securities Group is definitely worth keeping an eye on for someone looking to build a dedicated income 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 essential aspects you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for 665’s future growth? Take a look at our free research report of analyst consensus for 665’s outlook.

2. Valuation: What is 665 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 665 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 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.