Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Historically, Chongqing Rural Commercial Bank Co., Ltd. (OTCPK:CRCB.Y) has paid a dividend to shareholders. It currently yields 4.7%. Should it have a place in your portfolio? Let’s take a look at Chongqing Rural Commercial Bank in more detail.
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- 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?
- Can it afford to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Chongqing Rural Commercial Bank fit our criteria?
Chongqing Rural Commercial Bank has a trailing twelve-month payout ratio of 21%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 21% which, assuming the share price stays the same, leads to a dividend yield of 5.0%. In addition to this, EPS should increase to CN¥0.97.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
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 Chongqing Rural Commercial Bank 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.
Compared to its peers, Chongqing Rural Commercial Bank generates a yield of 4.7%, which is high for Banks stocks.
With these dividend metrics in mind, I definitely rank Chongqing Rural Commercial Bank 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, 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. Below, I’ve compiled three pertinent factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for CRCB.Y’s future growth? Take a look at our free research report of analyst consensus for CRCB.Y’s outlook.
- Valuation: What is CRCB.Y 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 CRCB.Y 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.