A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Over the past 10 years, Best World International Limited (SGX:CGN) has returned an average of 4.00% per year to shareholders in terms of dividend yield. Let’s dig deeper into whether Best World International should have a place in your portfolio. See our latest analysis for Best World International
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
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Does it pay an annual yield higher than 75% 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 be able to continue to payout at the current rate in the future?
How does Best World International fare?
Best World International has a trailing twelve-month payout ratio of 40.53%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect CGN’s payout to remain around the same level at 40.51% of its earnings, which leads to a dividend yield of around 3.60%. Moreover, EPS should increase to SGD0.11. 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. Relative to peers, Best World International generates a yield of 3.49%, which is high for Personal Products stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, Best World International 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, 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 essential factors you should look at:
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Future Outlook: What are well-informed industry analysts predicting for CGN’s future growth? Take a look at our free research report of analyst consensus for CGN’s outlook.
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Valuation: What is CGN 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 CGN 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.