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Attention dividend hunters! NagaCorp Ltd (SEHK:3918) will be distributing its dividend of $0.11 per share on the 17 May 2018, and will start trading ex-dividend in 2 days time on the 03 May 2018. Is this future income a persuasive enough catalyst for investors to think about NagaCorp 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 NagaCorp
5 questions I ask before picking 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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Does it pay an annual yield higher than 75% of dividend payers?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has the amount of dividend per share grown over the past?
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Does earnings amply cover its dividend payments?
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Will the company be able to keep paying dividend based on the future earnings growth?
How does NagaCorp fare?
The current trailing twelve-month payout ratio for the stock is 44.44%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 3918’s payout to increase to 56.50% of its earnings, which leads to a dividend yield of 4.38%. However, EPS is forecasted to fall to $0.07 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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. Relative to peers, NagaCorp produces a yield of 3.37%, which is high for Hospitality stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, NagaCorp ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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 look at:
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Future Outlook: What are well-informed industry analysts predicting for 3918’s future growth? Take a look at our free research report of analyst consensus for 3918’s outlook.
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Valuation: What is 3918 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 3918 is currently mispriced by the market.
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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 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.