Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. In the past 10 years China Merchants Port Holdings Company Limited (HKG:144) 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 China Merchants Port Holdings in more detail. See our latest analysis for China Merchants Port Holdings
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is its annual yield among the top 25% of dividend-paying companies?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has it increased its dividend per share amount over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How well does China Merchants Port Holdings fit our criteria?
The company currently pays out 44.04% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 45.03%, leading to a dividend yield of around 5.61%. Furthermore, EPS should increase to HK$2.22.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.Compared to its peers, China Merchants Port Holdings produces a yield of 5.08%, which is high for Infrastructure stocks but still below the market’s top dividend payers.
With these dividend metrics in mind, I definitely rank China Merchants Port 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. I’ve put together three key aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for 144’s future growth? Take a look at our free research report of analyst consensus for 144’s outlook.
- Valuation: What is 144 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 144 is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.