In This Article:
There is a lot to be liked about Kingboard Holdings Limited (HKG:148) as an income stock. It has paid dividends over the past 10 years. The company is currently worth HK$23b, and now yields roughly 7.3%. Should it have a place in your portfolio? Let’s take a look at Kingboard Holdings in more detail.
View our latest analysis for Kingboard Holdings
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Does it pay an annual yield higher than 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 dividend per share risen in the past couple of years?
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Can it afford to pay the current rate of dividends from its earnings?
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Will the company be able to keep paying dividend based on the future earnings growth?
Does Kingboard Holdings pass our checks?
The current trailing twelve-month payout ratio for the stock is 22%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 36%, leading to a dividend yield of around 7.9%. However, EPS is forecasted to fall to HK$4.42 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
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.
In terms of its peers, Kingboard Holdings produces a yield of 7.3%, which is high for Electronic stocks.
Next Steps:
With this in mind, I definitely rank Kingboard Holdings 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, 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. I’ve put together three fundamental factors you should look at:
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Future Outlook: What are well-informed industry analysts predicting for 148’s future growth? Take a look at our free research report of analyst consensus for 148’s outlook.
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Valuation: What is 148 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 148 is currently mispriced by the market.
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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.