What To Know Before Buying China Shenhua Energy Company Limited (HKG:1088) For Its Dividend
Over the past 10 years China Shenhua Energy Company Limited (SEHK:1088) has returned an average of 4.00% per year from dividend payouts. The company currently pays out a dividend yield of 5.30% to shareholders, making it a relatively attractive dividend stock. Should it have a place in your portfolio? Let’s take a look at China Shenhua Energy in more detail. View our latest analysis for China Shenhua Energy
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
Is it the top 25% annual dividend yield payer?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share risen in the past couple of years?
Can it afford to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How does China Shenhua Energy fare?
The current trailing twelve-month payout ratio for the stock is 38.45%, which means that the dividend is covered by earnings. Going forward, analysts expect 1088’s payout to remain around the same level at 41.49% of its earnings, which leads to a dividend yield of around 5.09%. Moreover, EPS is forecasted to fall to CN¥2.23 in the upcoming year. 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. Although 1088’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, China Shenhua Energy generates a yield of 5.30%, which is high for Oil and Gas stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank China Shenhua Energy as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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 relevant factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for 1088’s future growth? Take a look at our free research report of analyst consensus for 1088’s outlook.
Valuation: What is 1088 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 1088 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.
