Shares of Giordano International Limited (HKG:709) will begin trading ex-dividend in 3 days. To qualify for the dividend check of HK$0.17 per share, investors must have owned the shares prior to 07 September 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Giordano International’s latest financial data to analyse its dividend characteristics.

View our latest analysis for Giordano International

5 checks you should do on a dividend stock

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

• Does it pay an annual yield higher than 75% of dividend payers?

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

• Has the amount of dividend per share grown over the past?

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

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

How does Giordano International fare?

Giordano International has a trailing twelve-month payout ratio of 114%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a payout ratio of 104%, leading to a dividend yield of 8.9%. Moreover, EPS should increase to HK$0.36.

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. Although 709’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time.

Relative to peers, Giordano International produces a yield of 8.4%, which is high for Specialty Retail stocks.

Next Steps:

If Giordano International is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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, 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 relevant factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for 709’s future growth? Take a look at our free research report of analyst consensus for 709’s outlook.

2. Valuation: What is 709 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 709 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.