Investors who want to cash in on KWG Group Holdings Limited’s (HKG:1813) upcoming dividend of CN¥0.25 per share have only 4 days left to buy the shares before its ex-dividend date, 13 September 2018, in time for dividends payable on the 16 January 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into KWG Group Holdings’s latest financial data to analyse its dividend attributes.

See our latest analysis for KWG Group Holdings

Here’s how I find good dividend stocks

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

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

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

• Has it increased its dividend per share amount over the past?

• 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?

How does KWG Group Holdings fare?

The company currently pays out 41.6% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect 1813’s payout to remain around the same level at 37.8% of its earnings, which leads to a dividend yield of 10.1%. Furthermore, EPS should increase to CN¥1.75.

When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

Relative to peers, KWG Group Holdings has a yield of 8.1%, which is high for Real Estate stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank KWG Group Holdings as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 pertinent factors you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for 1813’s future growth? Take a look at our free research report of analyst consensus for 1813’s outlook.

2. Valuation: What is 1813 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 1813 is currently mispriced by the market.

3. Other 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.