On the 13 July 2018, Sinopec Shanghai Petrochemical Company Limited (SEHK:338) will be paying shareholders an upcoming dividend amount of CN¥0.37 per share. However, investors must have bought the company’s stock before 19 June 2018 in order to qualify for the payment. That means you have only 2 days left! Should you diversify into Sinopec Shanghai Petrochemical and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View our latest analysis for Sinopec Shanghai Petrochemical
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it paying an annual yield above 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment or significantly cutting payout?
- 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 Sinopec Shanghai Petrochemical fare?
The current trailing twelve-month payout ratio for the stock is 54.19%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect 338’s payout to fall to 46.77% of its earnings, which leads to a dividend yield of around 5.41%. In addition to this, EPS is also forecasted to fall to CN¥0.53 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment 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. Although 338’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, Sinopec Shanghai Petrochemical generates a yield of 6.52%, which is high for Chemicals stocks.
With this in mind, I definitely rank Sinopec Shanghai Petrochemical as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three important factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for 338’s future growth? Take a look at our free research report of analyst consensus for 338’s outlook.
- Valuation: What is 338 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 338 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.