How Does Longfor Properties Co Ltd. (HKG:960) Fare As A Dividend Stock?

Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. In the past 8 years Longfor Properties Co Ltd. (SEHK:960) has returned an average of 3.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let's take a look at Longfor Properties in more detail. View our latest analysis for Longfor Properties

How I analyze a dividend stock

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

• Is its annual yield among the top 25% of dividend-paying companies?
• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
• Has it increased its dividend per share amount over the past?
• Is it able 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?

Does Longfor Properties pass our checks?

Longfor Properties has a trailing twelve-month payout ratio of 31.01%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 960's payout to increase to 41.03% of its earnings, which leads to a dividend yield of around 5.65%. In addition to this, EPS should increase to CN¥2.3. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Longfor Properties 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, Longfor Properties produces a yield of 3.50%, which is on the low-side for Real Estate stocks.

Next Steps:

Whilst there are few things you may like about Longfor Properties from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three pertinent aspects you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for 960’s future growth? Take a look at our free research report of analyst consensus for 960’s outlook.
2. Valuation: What is 960 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 960 is currently mispriced by the market.
3. 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.