Hang Seng Bank Limited (HKG:11): Dividend Is Coming In 3 Days, Should You Buy?

On the 23 March 2018, Hang Seng Bank Limited (SEHK:11) will be paying shareholders an upcoming dividend amount of HK$3.1 per share. However, investors must have bought the company's stock before 05 March 2018 in order to qualify for the payment. That means you have only 3 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Hang Seng Bank's latest financial data to analyse its dividend attributes. Check out our latest analysis for Hang Seng Bank

5 checks you should use to assess a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• 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 dividend per share risen in the past couple of years?
• Does earnings amply cover its dividend payments?
• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

Does Hang Seng Bank pass our checks?

The company currently pays out 65.05% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 11's payout to remain around the same level at 64.45% of its earnings, which leads to a dividend yield of 4.03%. Furthermore, EPS should increase to HK$11.35. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, Hang Seng Bank generates a yield of 3.44%, which is on the low-side for Banks stocks.

Next Steps:

Taking into account the dividend metrics, Hang Seng Bank ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. 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. There are three key aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 11’s future growth? Take a look at our free research report of analyst consensus for 11’s outlook.
2. Valuation: What is 11 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 11 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.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.