Attention dividend hunters! Ngai Hing Hong Company Limited (HKG:1047) will be distributing its dividend of HK$0.02 per share on the 14 December 2018, and will start trading ex-dividend in 4 days time on the 27 November 2018. Is this future income a persuasive enough catalyst for investors to think about Ngai Hing Hong as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.

See our latest analysis for Ngai Hing Hong

5 questions I ask before picking a dividend stock

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

• Does it pay an annual yield higher than 75% of dividend payers?

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

• Has the amount of dividend per share grown over the past?

• Is is able to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

How does Ngai Hing Hong fare?

Ngai Hing Hong has a trailing twelve-month payout ratio of 24%, meaning the dividend is sufficiently 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 considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.

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, Ngai Hing Hong generates a yield of 5.0%, which is on the low-side for Chemicals stocks.

Next Steps:

If you are building an income portfolio, then Ngai Hing Hong is a complicated choice since it has some positive aspects as well as negative ones. 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, 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. Below, I’ve compiled three pertinent factors you should further examine: