Have you been keeping an eye on Kin Yat Holdings Limited’s (HKG:638) upcoming dividend of HK$0.03 per share payable on the 11 January 2019? Then you only have 4 days left before the stock starts trading ex-dividend on the 10 December 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Kin Yat Holdings’s latest financial data to analyse its dividend characteristics.
View our latest analysis for Kin Yat Holdings
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is it paying an annual yield above 75% 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 it increased its dividend per share amount over the past?
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Does earnings amply cover its dividend payments?
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Will it have the ability to keep paying its dividends going forward?
How does Kin Yat Holdings fare?
The current trailing twelve-month payout ratio for the stock is 36%, 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.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Dividend payments from Kin Yat Holdings have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
Relative to peers, Kin Yat Holdings has a yield of 7.1%, which is high for Consumer Durables stocks.
Next Steps:
Whilst there are few things you may like about Kin Yat Holdings from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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: