What To Know Before Buying Techtronic Industries Company Limited (HKG:669) For Its Dividend
A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. In the past 10 years Techtronic Industries Company Limited (SEHK:669) has returned an average of 1.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Techtronic Industries in more detail. View our latest analysis for Techtronic Industries
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Does it pay an annual yield higher than 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
How does Techtronic Industries fare?
Techtronic Industries has a trailing twelve-month payout ratio of 33.87%, which means that the dividend is covered by earnings. Going forward, analysts expect 669’s payout to increase to 37.87% of its earnings, which leads to a dividend yield of 2.18%. Moreover, EPS should increase to $0.3. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. 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. Although 669’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, Techtronic Industries generates a yield of 1.52%, which is on the low-side for Consumer Durables stocks.
Next Steps:
Taking all the above into account, Techtronic Industries is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer 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 essential factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for 669’s future growth? Take a look at our free research report of analyst consensus for 669’s outlook.
Valuation: What is 669 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 669 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.
To help readers see pass 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.
