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Does China Resources Phoenix Healthcare Holdings Company Limited (HKG:1515) Have A Place In Your Dividend Stock Portfolio?

A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. China Resources Phoenix Healthcare Holdings Company Limited (HKG:1515) has recently paid dividends to shareholders, and currently yields 1.4%. Does China Resources Phoenix Healthcare Holdings tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.

See our latest analysis for China Resources Phoenix Healthcare Holdings

5 questions to ask before buying a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

  • Is it the top 25% annual dividend yield payer?

  • Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

  • Has the amount of dividend per share grown over the past?

  • Is its earnings sufficient to payout dividend at the current rate?

  • Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

SEHK:1515 Historical Dividend Yield August 29th 18
SEHK:1515 Historical Dividend Yield August 29th 18

Does China Resources Phoenix Healthcare Holdings pass our checks?

The current trailing twelve-month payout ratio for the stock is 38.1%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 29.0%, leading to a dividend yield of around 1.9%. However, EPS should increase to CN¥0.34, 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. Unfortunately, it is really too early to view China Resources Phoenix Healthcare Holdings as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, China Resources Phoenix Healthcare Holdings generates a yield of 1.4%, which is on the low-side for Healthcare stocks.

Next Steps:

After digging a little deeper into China Resources Phoenix Healthcare Holdings’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering 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. There are three important factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for 1515’s future growth? Take a look at our free research report of analyst consensus for 1515’s outlook.

  2. Valuation: What is 1515 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 1515 is currently mispriced by the market.

  3. 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.

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