Income Investors Should Know The Hotel Grand Central Limited (SGX:H18) Ex-Dividend Date
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Have you been keeping an eye on Hotel Grand Central Limited's (SGX:H18) upcoming dividend of S$0.04 per share payable on the 31 May 2019? Then you only have 4 days left before the stock starts trading ex-dividend on the 13 May 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Hotel Grand Central's latest financial data to analyse its dividend characteristics.
See our latest analysis for Hotel Grand Central
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is their annual yield among the top 25% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has it increased its dividend per share amount over the past?
Can it afford to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Hotel Grand Central fit our criteria?
Hotel Grand Central has a trailing twelve-month payout ratio of 108%, meaning the dividend is not sufficiently covered by its 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 thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Unfortunately, it is really too early to view Hotel Grand Central as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Hotel Grand Central generates a yield of 2.9%, which is on the low-side for Hospitality stocks.
Next Steps:
After digging a little deeper into Hotel Grand Central's yield, it's easy to see why you should be cautious investing in the company just 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I've compiled three relevant aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for H18’s future growth? Take a look at our free research report of analyst consensus for H18’s outlook.
Valuation: What is H18 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 H18 is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
