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Attention dividend hunters! SIIC Environment Holdings Ltd (SGX:BHK) will be distributing its dividend of CN¥0.01 per share on the 28 September 2018, and will start trading ex-dividend in 2 days time on the 30 August 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding SIIC Environment Holdings can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.

Check out our latest analysis for SIIC Environment Holdings

Here’s how I find good dividend stocks

When researching a dividend stock, I always follow the following screening criteria:

• Is it the top 25% annual dividend yield payer?

• 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 the company be able to keep paying dividend based on the future earnings growth?

How does SIIC Environment Holdings fare?

SIIC Environment Holdings has a trailing twelve-month payout ratio of 23.0%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect BHK’s payout to remain around the same level at 24.0% of its earnings, which leads to a dividend yield of 3.2%. In addition to this, EPS should increase to CN¥0.23.

Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Not only have dividend payouts from SIIC Environment Holdings fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.

Compared to its peers, SIIC Environment Holdings has a yield of 5.6%, which is high for Water Utilities stocks.

Next Steps:

With this in mind, I definitely rank SIIC Environment 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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three fundamental factors you should further examine:

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

2. Valuation: What is BHK 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 BHK 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 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.