Have you been keeping an eye on China Travel International Investment Hong Kong Limited’s (SEHK:308) upcoming dividend of HK$0.06 per share payable on the 29 June 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 05 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine China Travel International Investment Hong Kong’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for China Travel International Investment Hong Kong

How I analyze a dividend stock

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

• Is their annual yield among the top 25% of dividend payers?

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

• Has it increased its dividend per share amount over the past?

• Does earnings amply cover its dividend payments?

• Will it be able to continue to payout at the current rate in the future?

How well does China Travel International Investment Hong Kong fit our criteria?

The current trailing twelve-month payout ratio for the stock is 41.07%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 40.38%, leading to a dividend yield of around 3.34%. Furthermore, EPS is forecasted to fall to HK$0.15 in the upcoming year. 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. Although 308’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. Compared to its peers, China Travel International Investment Hong Kong has a yield of 2.44%, which is high for Hospitality stocks but still below the market’s top dividend payers.

Next Steps:

Keeping in mind the dividend characteristics above, China Travel International Investment Hong Kong is definitely worth considering for investors 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. Below, I’ve compiled three fundamental aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 308’s future growth? Take a look at our free research report of analyst consensus for 308’s outlook.

2. Valuation: What is 308 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 308 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 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.