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A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Thelloy Development Group Limited (SEHK:1546) has returned an average dividend yield of 7.00% annually to shareholders. Does Thelloy Development Group tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View our latest analysis for Thelloy Development Group
5 questions to ask before buying a dividend stock
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 its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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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 the company be able to keep paying dividend based on the future earnings growth?
Does Thelloy Development Group pass our checks?
The company currently pays out 34.25% of its earnings as a dividend, according to its trailing twelve-month data, 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. 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 Thelloy Development Group as a dividend investment. It has only been paying out dividend for the past one year. Generally, the rule of thumb for determining whether a stock is a reliable dividend payer is that it should be consistently paying dividends for the past 10 years or more. Clearly there’s a long road ahead before we can ascertain whether 1546 one as a stable dividend player. Compared to its peers, Thelloy Development Group generates a yield of 7.27%, which is high for Construction stocks.
Next Steps:
Whilst there are few things you may like about Thelloy Development Group from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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, 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 relevant factors you should further research: