Over the past 10 years Bank of Communications Co Ltd. (SEHK:3328) has returned an average of 3.00% per year from dividend payouts. The company is currently worth HK$521.41B, and now yields roughly 5.54%. Should it have a place in your portfolio? Let’s take a look at Bank of Communications in more detail. Check out our latest analysis for Bank of Communications
5 questions I ask before picking a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- 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 dividend per share amount increased over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Bank of Communications fare?
The current trailing twelve-month payout ratio for the stock is 31.06%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 31.19%, leading to a dividend yield of 6.07%. Furthermore, EPS should increase to CN¥0.95. 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. Although 3328’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. Relative to peers, Bank of Communications produces a yield of 5.54%, which is high for Banks stocks.
Keeping in mind the dividend characteristics above, Bank of Communications is definitely worth considering for investors looking to build a dedicated income portfolio. 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 essential factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for 3328’s future growth? Take a look at our free research report of analyst consensus for 3328’s outlook.
- Valuation: What is 3328 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 3328 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.