Yahoo Finance Wynn Macau Limited (HKG:1128) Will Pay HK$0.75 In Dividends
Have you been keeping an eye on Wynn Macau Limited’s (HKG:1128) upcoming dividend of HK$0.75 per share payable on the 05 October 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 18 September 2018. Is this future income a persuasive enough catalyst for investors to think about Wynn Macau as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
View our latest analysis for Wynn Macau
Here’s how I find good dividend stocks
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?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share risen in the past couple of years?
Can it afford 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?
How does Wynn Macau fare?
The company currently pays out 32.3% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 92.6%, leading to a dividend yield of around 8.3%. Moreover, EPS should increase to HK$1.35. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. However this does bring about uncertainty around the sustainability of the payout ratio.
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 there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Wynn Macau 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.
Compared to its peers, Wynn Macau produces a yield of 4.4%, which is high for Hospitality stocks but still below the market’s top dividend payers.
Next Steps:
After digging a little deeper into Wynn Macau’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, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three pertinent aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for 1128’s future growth? Take a look at our free research report of analyst consensus for 1128’s outlook.
Valuation: What is 1128 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 1128 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 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.
