Investors who want to cash in on Grand Baoxin Auto Group Limited’s (SEHK:1293) upcoming dividend of CN¥0.1 per share have only 5 days left to buy the shares before its ex-dividend date, 19 June 2018, in time for dividends payable on the 29 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Grand Baoxin Auto Group’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for Grand Baoxin Auto Group

Here’s how I find good dividend stocks

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

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

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has dividend per share amount increased over the past?

• Can it afford to pay the current rate of dividends from its earnings?

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

Does Grand Baoxin Auto Group pass our checks?

The current trailing twelve-month payout ratio for the stock is 26.98%, which means that the dividend is covered by earnings. Going forward, analysts expect 1293’s payout to remain around the same level at 25.13% of its earnings, which leads to a dividend yield of around 4.00%. Furthermore, EPS should increase to CN¥0.38. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Grand Baoxin Auto Group as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Grand Baoxin Auto Group has a yield of 2.82%, which is high for Specialty Retail stocks but still below the market’s top dividend payers.

Next Steps:

Whilst there are few things you may like about Grand Baoxin Auto Group from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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, 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 essential aspects you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for 1293’s future growth? Take a look at our free research report of analyst consensus for 1293’s outlook.

2. Valuation: What is 1293 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 1293 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 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.