A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. In the past, Cowell e Holdings Inc (HKG:1415) has returned an average of 3.00% per year to investors in the form of dividend payouts. Does Cowell e Holdings tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. Check out our latest analysis for Cowell e Holdings
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it the top 25% annual dividend yield payer?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Cowell e Holdings pass our checks?
The current trailing twelve-month payout ratio for the stock is 26.48%, which means that the dividend is covered by earnings. Going forward, analysts expect 1415’s payout to remain around the same level at 26.13% of its earnings, which leads to a dividend yield of 5.01%. Moreover, EPS is forecasted to fall to $0.033 in the upcoming year.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Cowell e Holdings as a dividend investment. It has only been paying out dividend for the past one year. Generally, the rule of thumb for determining whether a stock is a reliable dividend payer is that it should be consistently paying dividends for the past 10 years or more. Clearly there’s a long road ahead before we can ascertain whether 1415 one as a stable dividend player.Compared to its peers, Cowell e Holdings generates a yield of 4.27%, which is high for Electronic stocks but still below the market’s top dividend payers.
If you are building an income portfolio, then Cowell e Holdings is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. There are three relevant aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for 1415’s future growth? Take a look at our free research report of analyst consensus for 1415’s outlook.
- Valuation: What is 1415 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 1415 is currently mispriced by the market.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.