There is a lot to be liked about Hengan International Group Company Limited (SEHK:1044) as an income stock, over the past 10 years it has returned an average of 2.00% per year. The company is currently worth HK$91.41B, and now yields roughly 3.17%. Should it have a place in your portfolio? Let’s take a look at Hengan International Group in more detail. See our latest analysis for Hengan International Group
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 its annual yield among the top 25% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share risen in the past couple of years?
- Is it able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How well does Hengan International Group fit our criteria?
The company currently pays out 69.75% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect 1044’s payout to remain around the same level at 65.04% of its earnings, which leads to a dividend yield of around 3.65%. In addition to this, EPS should increase to CN¥3.19. 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. In the case of 1044 it has increased its DPS from CN¥0.56 to CN¥2.4 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Relative to peers, Hengan International Group generates a yield of 3.17%, which is high for Personal Products stocks but still below the market’s top dividend payers.
With these dividend metrics in mind, I definitely rank Hengan International Group 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. Below, I’ve compiled three important aspects you should look at:
- 1. Future Outlook: What are well-informed industry analysts predicting for 1044’s future growth? Take a look at our free research report of analyst consensus for 1044’s outlook.
- 2. Valuation: What is 1044 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 1044 is currently mispriced by the market.
- 3. 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.