BOC Hong Kong (Holdings) Limited (HKG:2388): What You Have To Know Before Buying For The Upcoming Dividend

Attention dividend hunters! BOC Hong Kong (Holdings) Limited (HKG:2388) will be distributing its dividend of HK$0.76 per share on the 16 July 2018, and will start trading ex-dividend in 2 days time on the 29 June 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding BOC Hong Kong (Holdings) can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for BOC Hong Kong (Holdings)

5 questions to ask before buying a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• 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 dividend per share risen in the past couple of years?

• Can it afford to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

SEHK:2388 Historical Dividend Yield June 26th 18

Does BOC Hong Kong (Holdings) pass our checks?

The company currently pays out 48.37% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 2388’s payout to remain around the same level at 48.79% of its earnings, which leads to a dividend yield of around 4.31%. Furthermore, EPS should increase to HK$3.09.

If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.

In terms of its peers, BOC Hong Kong (Holdings) produces a yield of 3.64%, which is on the low-side for Banks stocks.

Next Steps:

Considering the dividend attributes we analyzed above, BOC Hong Kong (Holdings) is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 fundamental factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 2388’s future growth? Take a look at our free research report of analyst consensus for 2388’s outlook.

2. Valuation: What is 2388 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 2388 is currently mispriced by the market.

3. Other 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.