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Important news for shareholders and potential investors in Highway Holdings Limited (NASDAQ:HIHO): The dividend payment of $0.1 per share will be distributed into shareholder on 16 April 2018, and the stock will begin trading ex-dividend at an earlier date, 27 March 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Highway Holdings can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Highway Holdings
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is their annual yield among the top 25% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share amount increased over the past?
Is it able to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
Does Highway Holdings pass our checks?
Highway Holdings has a trailing twelve-month payout ratio of 107.36%, which means that the dividend is not well-covered by its 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 there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although HIHO’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. In terms of its peers, Highway Holdings produces a yield of 6.78%, which is high for Machinery stocks.
Whilst there are few things you may like about Highway Holdings from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. 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 relevant factors you should further examine:
Valuation: What is HIHO 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 HIHO is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Highway Holdings’s board and the CEO’s back ground.
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.