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Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Historically, Hopefluent Group Holdings Limited (HKG:733) has paid dividends to shareholders, and these days it yields 5.6%. Let’s dig deeper into whether Hopefluent Group Holdings should have a place in your portfolio.
Check out our latest analysis for Hopefluent Group Holdings
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:
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Is its annual yield among the top 25% of dividend-paying companies?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has dividend per share risen in the past couple of years?
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Is its earnings sufficient to payout dividend at the current rate?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Hopefluent Group Holdings fare?
Hopefluent Group Holdings has a trailing twelve-month payout ratio of 27%, 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.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Hopefluent Group Holdings as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Hopefluent Group Holdings has a yield of 5.6%, which is high for Real Estate stocks.
Next Steps:
If you are building an income portfolio, then Hopefluent Group Holdings is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. There are three fundamental aspects you should further examine: