Investors who want to cash in on Guangshen Railway Company Limited’s (SEHK:525) upcoming dividend of CN¥0.1 per share have only 2 days left to buy the shares before its ex-dividend date, 12 June 2018, in time for dividends payable on the 05 August 2018. Should you diversify into Guangshen Railway and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View our latest analysis for Guangshen Railway
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount 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?
How well does Guangshen Railway fit our criteria?
Guangshen Railway has a trailing twelve-month payout ratio of 48.10%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 51.90%, leading to a dividend yield of around 3.25%. Furthermore, EPS should increase to CN¥0.23. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although 525’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. In terms of its peers, Guangshen Railway generates a yield of 2.14%, which is on the low-side for Transportation stocks.
Keeping in mind the dividend characteristics above, Guangshen Railway 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 fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for 525’s future growth? Take a look at our free research report of analyst consensus for 525’s outlook.
- Valuation: What is 525 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 525 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.