On the 31 August 2018, Zhejiang Expressway Co Ltd (HKG:576) will be paying shareholders an upcoming dividend amount of CN¥0.30 per share. However, investors must have bought the company’s stock before 04 July 2018 in order to qualify for the payment. That means you have only 2 days left! 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 Zhejiang Expressway’s most recent financial data to examine its dividend characteristics in more detail. View out our latest analysis for Zhejiang Expressway
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
- It is paying an annual yield above 75% of dividend payers
- It has paid dividend every year without dramatically reducing payout in the past
- Its dividend per share amount has increased over the past
- It is able to pay the current rate of dividends from its earnings
- It has the ability to keep paying its dividends going forward
High Yield And Dependable
Zhejiang Expressway’s dividend yield stands at 6.25%, which is high for Infrastructure stocks. But the real reason Zhejiang Expressway stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. 576 has increased its DPS from CN¥0.35 to CN¥0.43 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes 576 a true dividend rockstar.
Zhejiang Expressway has a trailing twelve-month payout ratio of 48.38%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 50.60%, leading to a dividend yield of around 6.95%. Furthermore, EPS should increase to CN¥0.75.
Next Steps:
Zhejiang Expressway ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given 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 key factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for 576’s future growth? Take a look at our free research report of analyst consensus for 576’s outlook.
- Valuation: What is 576 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 576 is currently mispriced by the market.
- Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.