In This Article:
Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Over the past 10 years, China Shineway Pharmaceutical Group Limited (SEHK:2877) has returned an average of 4.00% per year to shareholders in terms of dividend yield. Let’s dig deeper into whether China Shineway Pharmaceutical Group should have a place in your portfolio. View our latest analysis for China Shineway Pharmaceutical Group
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
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Is their annual yield among the top 25% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has dividend per share amount increased over the past?
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Does earnings amply cover its dividend payments?
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Will it have the ability to keep paying its dividends going forward?
Does China Shineway Pharmaceutical Group pass our checks?
The company currently pays out 38.37% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 96.09%, leading to a dividend yield of around 6.33%. However, EPS is forecasted to fall to CN¥0.55 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. This also brings about uncertainty around the sustainability of the payout 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. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, China Shineway Pharmaceutical Group has a yield of 3.35%, which is high for Pharmaceuticals stocks.
Next Steps:
Taking into account the dividend metrics, China Shineway Pharmaceutical Group 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. Below, I’ve compiled three relevant factors you should further examine:
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1. Future Outlook: What are well-informed industry analysts predicting for 2877’s future growth? Take a look at our free research report of analyst consensus for 2877’s outlook.
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2. Valuation: What is 2877 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 2877 is currently mispriced by the market.
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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 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.