Is Easyknit International Holdings Limited (HKG:1218) A Good Dividend Stock?
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A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Historically, Easyknit International Holdings Limited (HKG:1218) has paid a dividend to shareholders. It currently yields 1.2%. Let’s dig deeper into whether Easyknit International Holdings should have a place in your portfolio.
Check out our latest analysis for Easyknit International Holdings
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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 dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Will it have the ability to keep paying its dividends going forward?
Does Easyknit International Holdings pass our checks?
The company currently pays out 1.5% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Easyknit International Holdings as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, Easyknit International Holdings generates a yield of 1.2%, which is on the low-side for Real Estate stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Easyknit International Holdings for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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 pertinent aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for 1218’s future growth? Take a look at our free research report of analyst consensus for 1218’s outlook.
Historical Performance: What has 1218’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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.
