Is Lee & Man Chemical Company Limited (HKG:746) A Smart Pick For Income Investors?
A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Lee & Man Chemical Company Limited (HKG:746) has returned to shareholders over the past 10 years, an average dividend yield of 4.00% annually. Does Lee & Man Chemical tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View out our latest analysis for Lee & Man Chemical
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is its annual yield among the top 25% of dividend-paying companies?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share amount increased over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
Does Lee & Man Chemical pass our checks?
The current trailing twelve-month payout ratio for the stock is 35.20%, 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.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Although 746’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.
Relative to peers, Lee & Man Chemical generates a yield of 4.78%, which is on the low-side for Chemicals stocks.
Next Steps:
If Lee & Man Chemical is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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 key aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for 746’s future growth? Take a look at our free research report of analyst consensus for 746’s outlook.
Historical Performance: What has 746’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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.
