There is a lot to be liked about Lee and Man Paper Manufacturing Limited (SEHK:2314) as an income stock, over the past 10 years it has returned an average of 3.00% per year. The company currently pays out a dividend yield of 4.36% to shareholders, making it a relatively attractive dividend stock. Should it have a place in your portfolio? Let’s take a look at Lee and Man Paper Manufacturing in more detail. See our latest analysis for Lee and Man Paper Manufacturing
Here’s how I find good dividend stocks
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
-
Is its annual yield among the top 25% of dividend-paying companies?
-
Has it paid dividend every year without dramatically reducing payout in the past?
-
Has dividend per share amount increased over the past?
-
Does earnings amply cover its dividend payments?
-
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Lee and Man Paper Manufacturing fit our criteria?
The company currently pays out 33.19% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect 2314’s payout to remain around the same level at 34.31% of its earnings, which leads to a dividend yield of around 4.46%. Moreover, EPS should increase to HK$1.19. 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. Although 2314’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, Lee and Man Paper Manufacturing has a yield of 4.36%, which is high for Forestry stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Lee and Man Paper Manufacturing is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three key factors you should further examine:
-
Future Outlook: What are well-informed industry analysts predicting for 2314’s future growth? Take a look at our free research report of analyst consensus for 2314’s outlook.
-
Valuation: What is 2314 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 2314 is currently mispriced by the market.
-
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.