Attention dividend hunters! Wah Ha Realty Company Limited (HKG:278) will be distributing its dividend of HK$0.23 per share on the 28 September 2018, and will start trading ex-dividend in 3 days time on the 07 September 2018. Is this future income a persuasive enough catalyst for investors to think about Wah Ha Realty as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.

View our latest analysis for Wah Ha Realty

5 questions I ask before picking a dividend stock

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 its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• 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?

How well does Wah Ha Realty fit our criteria?

Wah Ha Realty has a trailing twelve-month payout ratio of 10.3%, 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 dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.

Compared to its peers, Wah Ha Realty has a yield of 4.2%, which is high for Real Estate stocks but still below the market’s top dividend payers.

Next Steps:

Whilst there are few things you may like about Wah Ha Realty 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three important factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 278’s future growth? Take a look at our free research report of analyst consensus for 278’s outlook.

2. Valuation: What is 278 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 278 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.