Interested In Helloworld Travel Limited (ASX:HLO)’s Upcoming AU$0.08 Dividend? You Have 4 Days Left
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Important news for shareholders and potential investors in Helloworld Travel Limited (ASX:HLO): The dividend payment of AU$0.08 per share will be distributed to shareholders on 15 March 2019, and the stock will begin trading ex-dividend at an earlier date, 27 February 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Helloworld Travel’s latest financial data to analyse its dividend attributes.
View our latest analysis for Helloworld Travel
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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 the amount of dividend per share grown over the past?
Can it afford 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?
Does Helloworld Travel pass our checks?
The current trailing twelve-month payout ratio for the stock is 69%, which means that the dividend is covered by earnings. Going forward, analysts expect HLO’s payout to remain around the same level at 64% of its earnings. Assuming a constant share price, this equates to a dividend yield of 4.5%. Furthermore, EPS should increase to A$0.35.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider 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 dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. The reality is that it is too early to consider Helloworld Travel as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Relative to peers, Helloworld Travel generates a yield of 3.5%, which is on the low-side for Hospitality stocks.
Next Steps:
Taking all the above into account, Helloworld Travel 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 important factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for HLO’s future growth? Take a look at our free research report of analyst consensus for HLO’s outlook.
Valuation: What is HLO 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 HLO 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
