Is Buying China Zhongwang Holdings Limited (HKG:1333) For Its Upcoming $0.15 Dividend A Good Choice?
Have you been keeping an eye on China Zhongwang Holdings Limited’s (SEHK:1333) upcoming dividend of CN¥0.15 per share payable on the 29 June 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 29 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into China Zhongwang Holdings’s latest financial data to analyse its dividend attributes. See our latest analysis for China Zhongwang Holdings
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:
Does it pay an annual yield higher than 75% of dividend payers?
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?
Will the company be able to keep paying dividend based on the future earnings growth?
Does China Zhongwang Holdings pass our checks?
The company currently pays out 41.65% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. However, going forward, analysts expect 1333’s payout to fall to 30.04% of its earnings, which leads to a dividend yield of around 5.54%. However, EPS should increase to CN¥0.6, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider China Zhongwang Holdings as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, China Zhongwang Holdings produces a yield of 5.57%, which is high for Metals and Mining stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank China Zhongwang Holdings as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 essential aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for 1333’s future growth? Take a look at our free research report of analyst consensus for 1333’s outlook.
Valuation: What is 1333 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 1333 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.
