If you are interested in cashing in on Yue Yuen Industrial (Holdings) Limited’s (HKG:551) upcoming dividend of US$0.40 per share, you only have 4 days left to buy the shares before its ex-dividend date, 13 September 2018, in time for dividends payable on the 11 October 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Yue Yuen Industrial (Holdings) can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
- Its annual yield is among the top 25% of dividend payers
- It consistently pays out dividend without missing a payment or significantly cutting payout
- 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 is able to continue to payout at the current rate in the future
High Yield And Dependable
Yue Yuen Industrial (Holdings)’s yield sits at 7.0%, which is high for Luxury stocks. But the real reason Yue Yuen Industrial (Holdings) 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. 551 has increased its DPS from $0.87 to $1.5 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.
The current trailing twelve-month payout ratio for the stock is 76.7%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 69.3%, leading to a dividend yield of 6.9%. Moreover, EPS is forecasted to fall to $0.24 in the upcoming year.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
There aren’t many other stocks out there with the same track record as Yue Yuen Industrial (Holdings), so I would certainly recommend further examining the stock if its dividend characteristics appeal to you. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three important factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for 551’s future growth? Take a look at our free research report of analyst consensus for 551’s outlook.
- Valuation: What is 551 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 551 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 past 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. For errors that warrant correction please contact the editor at email@example.com.