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Have you been keeping an eye on Chuang’s China Investments Limited’s (HKG:298) upcoming dividend of HK$0.02 per share payable on the 31 October 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 03 October 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Chuang’s China Investments’s latest financial data to analyse its dividend attributes.
Check out our latest analysis for Chuang’s China Investments
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is it the top 25% annual dividend yield payer?
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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 its earnings sufficient to payout dividend at the current rate?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Chuang’s China Investments fare?
The current trailing twelve-month payout ratio for the stock is 29.4%, 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. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although 298’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, Chuang’s China Investments has a yield of 6.9%, which is high for Real Estate stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Chuang’s China Investments is definitely worth considering for investors looking to build a dedicated income portfolio. 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 fundamental factors you should look at: