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There is a lot to be liked about Wasion Group Holdings Limited (SEHK:3393) as an income stock, over the past 10 years it has returned an average of 4.00% per year. The company is currently worth HK$4.18B, and now yields roughly 5.77%. Should it have a place in your portfolio? Let’s take a look at Wasion Group Holdings in more detail. See our latest analysis for Wasion Group 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:
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Is its annual yield among the top 25% 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 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 Wasion Group Holdings fare?
The company currently pays out 78.43% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 63.75%, leading to a dividend yield of around 6.05%. However, EPS should increase to CN¥0.31, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. In the case of 3393 it has increased its DPS from CN¥0.08 to CN¥0.24 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes 3393 a true dividend rockstar. Compared to its peers, Wasion Group Holdings has a yield of 5.77%, which is high for Electronic stocks.
Next Steps:
Taking into account the dividend metrics, Wasion Group Holdings 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, 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. Below, I’ve compiled three fundamental aspects you should further examine:
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1. Future Outlook: What are well-informed industry analysts predicting for 3393’s future growth? Take a look at our free research report of analyst consensus for 3393’s outlook.
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2. Valuation: What is 3393 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 3393 is currently mispriced by the market.
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3. 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.