In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Historically, Country Garden Holdings Company Limited (HKG:2007) has paid dividends to shareholders, and these days it yields 5.3%. Let’s dig deeper into whether Country Garden Holdings should have a place in your portfolio.
See our latest analysis for Country Garden Holdings
5 checks you should use to assess 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?
-
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
-
Has it increased its dividend per share amount over the past?
-
Can it afford to pay the current rate of dividends from its earnings?
-
Will it have the ability to keep paying its dividends going forward?
How well does Country Garden Holdings fit our criteria?
The current trailing twelve-month payout ratio for the stock is 29%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 18% which, assuming the share price stays the same, leads to a dividend yield of 7.4%. However, EPS should increase to CN¥1.79, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. 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, Country Garden Holdings produces a yield of 5.3%, which is high for Real Estate stocks but still below the market’s top dividend payers.
Next Steps:
Considering the dividend attributes we analyzed above, Country Garden Holdings is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 key aspects you should further examine: