Longfor Properties Co Ltd. (HKG:960): Ex-Dividend Is In 2 Days, Should You Buy?
Investors who want to cash in on Longfor Properties Co Ltd.’s (SEHK:960) upcoming dividend of CN¥0.56 per share have only 2 days left to buy the shares before its ex-dividend date, 20 June 2018, in time for dividends payable on the 10 July 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Longfor Properties’s latest financial data to analyse its dividend characteristics. View our latest analysis for Longfor Properties
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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?
Is its earnings sufficient to payout dividend at the current rate?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Longfor Properties fit our criteria?
The current trailing twelve-month payout ratio for the stock is 31.01%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 41.03%, leading to a dividend yield of 5.38%. Moreover, EPS should increase to CN¥2.3. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. 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 Longfor Properties as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Longfor Properties generates a yield of 3.34%, which is on the low-side for Real Estate stocks.
Next Steps:
Taking all the above into account, Longfor Properties is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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. I’ve put together three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for 960’s future growth? Take a look at our free research report of analyst consensus for 960’s outlook.
Valuation: What is 960 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 960 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.
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.
