Is ANTA Sports Products Limited (HKG:2020) An Attractive Dividend Stock?
Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Historically, ANTA Sports Products Limited (HKG:2020) has been paying a dividend to shareholders. Today it yields 3.1%. Let’s dig deeper into whether ANTA Sports Products should have a place in your portfolio.
View our latest analysis for ANTA Sports Products
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is their annual yield among the top 25% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has the amount of dividend per share grown over the past?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
Does ANTA Sports Products pass our checks?
The company currently pays out 56% 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 2020’s payout to increase to 71% of its earnings, which leads to a dividend yield of 4.1%. In addition to this, EPS should increase to CN¥1.66. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
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. Although 2020’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.
In terms of its peers, ANTA Sports Products has a yield of 3.1%, which is on the low-side for Luxury stocks.
Next Steps:
Considering the dividend attributes we analyzed above, ANTA Sports Products is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 key aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for 2020’s future growth? Take a look at our free research report of analyst consensus for 2020’s outlook.
Valuation: What is 2020 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 2020 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
