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Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Historically, Changan Minsheng APLL Logistics Co Ltd (HKG:1292) has been paying a dividend to shareholders. Today it yields 4.1%. Should it have a place in your portfolio? Let’s take a look at Changan Minsheng APLL Logistics in more detail.
View our latest analysis for Changan Minsheng APLL Logistics
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Is it the top 25% annual dividend yield payer?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has dividend per share risen in the past couple of years?
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Does earnings amply cover its dividend payments?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does Changan Minsheng APLL Logistics fit our criteria?
The company currently pays out 19.9% 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.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although 1292’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Changan Minsheng APLL Logistics produces a yield of 4.1%, which is high for Logistics stocks but still below the market’s top dividend payers.
Next Steps:
If Changan Minsheng APLL Logistics is in your portfolio for cash-generating reasons, there may be better alternatives out there. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. Below, I’ve compiled three pertinent aspects you should further research: