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Investors who want to cash in on Best Pacific International Holdings Limited’s (SEHK:2111) upcoming dividend of HK$0.06 per share have only 8 days left to buy the shares before its ex-dividend date, 25 May 2018, in time for dividends payable on the 13 June 2018. Is this future income a persuasive enough catalyst for investors to think about Best Pacific International Holdings as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for Best Pacific International Holdings

5 checks you should use to assess a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is it paying an annual yield above 75% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has dividend per share risen in the past couple of years?

• Can it afford to pay the current rate of dividends from its earnings?

• Will the company be able to keep paying dividend based on the future earnings growth?

Does Best Pacific International Holdings pass our checks?

Best Pacific International Holdings has a trailing twelve-month payout ratio of 20.03%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 2111’s payout to increase to 28.75% of its earnings, which leads to a dividend yield of around 4.05%. Furthermore, EPS should increase to HK$0.38. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. The reality is that it is too early to consider Best Pacific International Holdings as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Best Pacific International Holdings generates a yield of 1.89%, which is on the low-side for Luxury stocks.

Next Steps:

If you are building an income portfolio, then Best Pacific International Holdings is a complicated choice since it has some positive aspects as well as negative ones. 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, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three important aspects you should look at: