Read This Before Buying Tradelink Electronic Commerce Limited (HKG:536) For Its Upcoming $0.06 Dividend

If you are interested in cashing in on Tradelink Electronic Commerce Limited's (SEHK:536) upcoming dividend of HK$0.06 per share, you only have 2 days left to buy the shares before its ex-dividend date, 15 May 2018, in time for dividends payable on the 30 May 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let's take a look at Tradelink Electronic Commerce's most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Tradelink Electronic Commerce

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 paid dividend every year without dramatically reducing payout in the past?
• Has dividend per share amount increased over the past?
• Does earnings amply cover its dividend payments?
• Will the company be able to keep paying dividend based on the future earnings growth?

How does Tradelink Electronic Commerce fare?

Tradelink Electronic Commerce has a trailing twelve-month payout ratio of 101.84%, which means that the dividend is not well-covered by its earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. 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. Not only have dividend payouts from Tradelink Electronic Commerce fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. In terms of its peers, Tradelink Electronic Commerce produces a yield of 6.93%, which is high for IT stocks.

Next Steps:

After digging a little deeper into Tradelink Electronic Commerce's yield, it's easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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. I've put together three fundamental aspects you should further research:

1. Valuation: What is 536 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 536 is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tradelink Electronic Commerce’s board and the CEO’s back ground.
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.