Important news for shareholders and potential investors in Swire Properties Limited (SEHK:1972): The dividend payment of HK$0.52 per share will be distributed into shareholder on 03 May 2018, and the stock will begin trading ex-dividend at an earlier date, 03 April 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Swire Properties’s latest financial data to analyse its dividend attributes. View our latest analysis for Swire Properties
5 questions to ask before buying a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How well does Swire Properties fit our criteria?
The company currently pays out 13.27% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 60.62%, leading to a dividend yield of around 2.98%. However, EPS is forecasted to fall to HK$1.42 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Swire Properties as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Swire Properties produces a yield of 2.80%, which is on the low-side for Real Estate stocks.
If you are building an income portfolio, then Swire Properties 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 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 essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for 1972’s future growth? Take a look at our free research report of analyst consensus for 1972’s outlook.
- Valuation: What is 1972 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 1972 is currently mispriced by the market.
- 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.