4 Days Left To Cash In On Beijing Enterprises Water Group Limited (HKG:371) Dividend,
Have you been keeping an eye on Beijing Enterprises Water Group Limited’s (HKG:371) upcoming dividend of HK$0.095 per share payable on the 19 October 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 26 September 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Beijing Enterprises Water Group’s most recent financial data to examine its dividend characteristics in more detail.
Check out our latest analysis for Beijing Enterprises Water Group
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Does it pay an annual yield higher than 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has it increased its dividend per share amount over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it be able to continue to payout at the current rate in the future?
Does Beijing Enterprises Water Group pass our checks?
The company currently pays out 36.8% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 371’s payout to remain around the same level at 35.7% of its earnings, which leads to a dividend yield of around 4.8%. Moreover, EPS should increase to HK$0.53.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
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 Beijing Enterprises Water Group 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, Beijing Enterprises Water Group produces a yield of 4.1%, which is high for Water Utilities stocks but still below the market’s top dividend payers.
Next Steps:
Taking all the above into account, Beijing Enterprises Water Group is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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 recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three pertinent aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for 371’s future growth? Take a look at our free research report of analyst consensus for 371’s outlook.
Valuation: What is 371 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 371 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
