Should Income Investors Buy Genting Hong Kong Limited (HKG:678) Before Its Ex-Dividend?

Investors who want to cash in on Genting Hong Kong Limited’s (HKG:678) upcoming dividend of HK$0.01 per share have only 2 days left to buy the shares before its ex-dividend date, 28 June 2018, in time for dividends payable on the 17 July 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Genting Hong Kong’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Genting Hong Kong

5 checks you should use to assess a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Is it paying an annual yield above 75% 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?

• Is is able to pay the current rate of dividends from its earnings?

• Will the company be able to keep paying dividend based on the future earnings growth?

SEHK:678 Historical Dividend Yield June 25th 18

Does Genting Hong Kong pass our checks?

The current payout ratio for 678 is negative, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings.

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 Genting Hong Kong as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Genting Hong Kong produces a yield of 9.80%, which is high for Hospitality stocks.

Next Steps:

After digging a little deeper into Genting Hong Kong’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 essential factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 678’s future growth? Take a look at our free research report of analyst consensus for 678’s outlook.

2. Historical Performance: What has 678’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.

3. 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.