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Have you been keeping an eye on Bank of Chongqing Co Ltd.’s (SEHK:1963) upcoming dividend of CN¥0.15 per share payable on the 20 July 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 21 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Bank of Chongqing’s latest financial data to analyse its dividend characteristics. View our latest analysis for Bank of Chongqing
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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Is their annual yield among the top 25% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has dividend per share amount increased over the past?
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Is it able to pay the current rate of dividends from its earnings?
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Will it be able to continue to payout at the current rate in the future?
Does Bank of Chongqing pass our checks?
The current trailing twelve-month payout ratio for the stock is 9.83%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 18.52%, leading to a dividend yield of 4.89%. Furthermore, EPS should increase to CN¥1.24. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors 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. The reality is that it is too early to consider Bank of Chongqing as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Bank of Chongqing produces a yield of 2.62%, which is on the low-side for Banks stocks.
Next Steps:
Taking all the above into account, Bank of Chongqing is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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 fundamental aspects you should further research:
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Future Outlook: What are well-informed industry analysts predicting for 1963’s future growth? Take a look at our free research report of analyst consensus for 1963’s outlook.
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Valuation: What is 1963 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 1963 is currently mispriced by the market.
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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.