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If you are interested in cashing in on APT Satellite Holdings Limited’s (HKG:1045) upcoming dividend of HK$0.04 per share, you only have 4 days left to buy the shares before its ex-dividend date, 27 September 2018, in time for dividends payable on the 19 October 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into APT Satellite Holdings’s latest financial data to analyse its dividend attributes.

Check out our latest analysis for APT Satellite Holdings

5 checks you should do on a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is it the top 25% annual dividend yield payer?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has it increased its dividend per share amount over the past?

• Is is able to pay the current rate of dividends from its earnings?

• Will it be able to continue to payout at the current rate in the future?

Does APT Satellite Holdings pass our checks?

The current trailing twelve-month payout ratio for the stock is 24.9%, meaning the dividend is sufficiently 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.

If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view APT Satellite 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, APT Satellite Holdings has a yield of 5.0%, which is high for Telecom stocks but still below the market’s top dividend payers.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in APT Satellite Holdings for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 key factors you should further examine: