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Important news for shareholders and potential investors in SITC International Holdings Company Limited (SEHK:1308): The dividend payment of $0.2 per share will be distributed into shareholder on 30 May 2018, and the stock will begin trading ex-dividend at an earlier date, 16 May 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding SITC International Holdings can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for SITC International Holdings
5 checks you should do on a dividend stock
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 paid dividend every year without dramatically reducing payout in the past?
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Has it increased its dividend per share amount over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Will it be able to continue to payout at the current rate in the future?
How well does SITC International Holdings fit our criteria?
The company currently pays out 53.69% 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 74.11%, leading to a dividend yield of around 6.20%. Furthermore, EPS should increase to $0.08. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. 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. Unfortunately, it is really too early to view SITC International Holdings as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, SITC International Holdings has a yield of 5.84%, which is high for Shipping stocks.
Next Steps:
With this in mind, I definitely rank SITC International Holdings as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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 research: