Hongkong Land Holdings' (SGX:H78) Dividend Will Be $0.06

Hongkong Land Holdings Limited (SGX:H78) will pay a dividend of $0.06 on the 15th of October. This means that the annual payment will be 3.8% of the current stock price, which is in line with the average for the industry.

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Hongkong Land Holdings' Projections Indicate Future Payments May Be Unsustainable

Estimates Indicate Hongkong Land Holdings' Could Struggle to Maintain Dividend Payments In The Future

Hongkong Land Holdings' Future Dividends May Potentially Be At Risk

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. The company is paying out a large amount of its cash flows, even though it isn't generating any profit. This makes us feel that the dividend will be hard to maintain.

EPS is forecast to rise very quickly over the next 12 months. Assuming the dividend continues along recent trends, we could see the payout ratio reach 152%, which is on the unsustainable side.

View our latest analysis for Hongkong Land Holdings

Hongkong Land Holdings Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.19 in 2015, and the most recent fiscal year payment was $0.23. This means that it has been growing its distributions at 1.9% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

The Company Could Face Some Challenges Growing The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Hongkong Land Holdings has seen EPS rising for the last five years, at 21% per annum. Even though the company is not profitable, it is growing at a solid clip. If the company can turn a profit relatively soon, we can see this becoming a reliable income stock.

Hongkong Land Holdings' Dividend Doesn't Look Sustainable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Hongkong Land Holdings' payments, as there could be some issues with sustaining them into the future. We can't deny that the payments have been very stable, but we are a little bit worried about the very high payout ratio. Overall, we don't think this company has the makings of a good income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Hongkong Land Holdings that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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