Should Jerash Holdings (US), Inc. (NASDAQ:JRSH) Be Part Of Your Income Portfolio?
Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Jerash Holdings (US), Inc. (NASDAQ:JRSH) has started paying a dividend to shareholders. It currently trades on a yield of 2.6%. Should it have a place in your portfolio? Let's take a look at Jerash Holdings (US) in more detail.
See our latest analysis for Jerash Holdings (US)
5 checks you should do on 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 it paid dividend every year without dramatically reducing payout in the past?
Has the amount of dividend per share grown over the past?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Jerash Holdings (US) fit our criteria?
Jerash Holdings (US) has a trailing twelve-month payout ratio of 12%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. The reality is that it is too early to consider Jerash Holdings (US) as a dividend investment. Last year was the company's first dividend payment, so it is certainly early days. The standard practice for reliable payers is to look for 10 or so years of track record.
In terms of its peers, Jerash Holdings (US) generates a yield of 2.6%, which is high for Luxury stocks but still below the market's top dividend payers.
Next Steps:
After digging a little deeper into Jerash Holdings (US)'s yield, it's easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for JRSH’s future growth? Take a look at our free research report of analyst consensus for JRSH’s outlook.
Valuation: What is JRSH 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 JRSH 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.