Investors who want to cash in on Telecom Service One Holdings Limited’s (SEHK:8145) upcoming dividend of HK$0.02 per share have only 2 days left to buy the shares before its ex-dividend date, 21 February 2018, in time for dividends payable on the 02 March 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Telecom Service One Holdings’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for Telecom Service One Holdings
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Is it the top 25% annual dividend yield payer?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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Has dividend per share risen in the past couple of years?
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Can it afford to pay the current rate of dividends from its earnings?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does Telecom Service One Holdings fit our criteria?
The current trailing twelve-month payout ratio for the stock is 21.83%, which means that the dividend is 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. The reality is that it is too early to consider Telecom Service One Holdings as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Telecom Service One Holdings produces a yield of 4.02%, which is high for Commercial Services stocks.
Next Steps:
If Telecom Service One Holdings is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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 key factors you should further examine:
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1. Historical Performance: What has 8145’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Telecom Service One Holdings’s board and the CEO’s back ground.
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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.