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Have you been keeping an eye on Upbest Group Limited’s (HKG:335) upcoming dividend of HK$0.036 per share payable on the 28 September 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 10 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Upbest Group’s latest financial data to analyse its dividend characteristics.

View our latest analysis for Upbest Group

How I analyze a dividend stock

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

• Is it paying an annual yield above 75% of dividend payers?

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

• Has dividend per share risen in the past couple of years?

• Does earnings amply cover its dividend payments?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

Does Upbest Group pass our checks?

The current trailing twelve-month payout ratio for the stock is 29.5%, 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.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although 335’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, Upbest Group has a yield of 1.8%, which is on the low-side for Retail Distributors stocks.

Next Steps:

After digging a little deeper into Upbest Group’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. 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. I’ve put together three fundamental aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for 335’s future growth? Take a look at our free research report of analyst consensus for 335’s outlook.

2. Valuation: What is 335 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 335 is currently mispriced by the market.

3. 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.