Over the past 10 years Industrial and Commercial Bank of China Limited (SEHK:1398) has grown its dividend payouts from CN¥0.15 to CN¥0.3. With a market cap of HK$2.60T, Industrial and Commercial Bank of China pays out 30.10% of its earnings, leading to a 4.39% yield. Let me elaborate on you why the stock stands out for income investors like myself. Check out our latest analysis for Industrial and Commercial Bank of China
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically: Its annual yield is among the top 25% of dividend payers It has paid dividend every year without dramatically reducing payout in the past Its has increased its dividend per share amount over the past It is able to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward
High Yield And Dependable
The company’s dividend yield stands at 4.39%, which is high for Banks stocks. But the real reason Industrial and Commercial Bank of China stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. 1398 has increased its DPS from CN¥0.15 to CN¥0.3 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. This is an impressive feat, which makes 1398 a true dividend rockstar. The company currently pays out 30.10% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 30.09%, leading to a dividend yield of 5.21%. Furthermore, EPS should increase to CN¥0.88.
There aren’t many other stocks out there with the same track record as Industrial and Commercial Bank of China, so I would certainly recommend further examining the stock if its dividend characteristics appeal to you. However, given 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 relevant factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for 1398’s future growth? Take a look at our free research report of analyst consensus for 1398’s outlook.
- Valuation: What is 1398 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 1398 is currently mispriced by the market.
- Other Dividend Rockstars: Are there strong dividend payers with better 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.