Should You Buy Kingboard Chemical Holdings Limited (HKG:148) For Its Dividend?

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 10 years Kingboard Chemical Holdings Limited (SEHK:148) 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 Kingboard Chemical Holdings in more detail. View our latest analysis for Kingboard Chemical Holdings

5 checks you should use to assess a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• 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?
• Can it afford to pay the current rate of dividends from its earnings?
• Will the company be able to keep paying dividend based on the future earnings growth?

Does Kingboard Chemical Holdings pass our checks?

The company currently pays out 23.59% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect 148's payout to increase to 27.74% of its earnings, which leads to a dividend yield of 3.63%. In addition to this, EPS should increase to HK$5.83. 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. Although 148's per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. Relative to peers, Kingboard Chemical Holdings has a yield of 3.00%, which is high for Electronic stocks but still below the market's top dividend payers.

Next Steps:

With these dividend metrics in mind, I definitely rank Kingboard Chemical Holdings 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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I've compiled three relevant factors you should further research:

• 1. Future Outlook: What are well-informed industry analysts predicting for 148’s future growth? Take a look at our free research report of analyst consensus for 148’s outlook.
• 2. Valuation: What is 148 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 148 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.