CITIC Limited (HKG:267): What You Have To Know Before Buying For The Upcoming Dividend

Have you been keeping an eye on CITIC Limited’s (HKG:267) upcoming dividend of HK$0.15 per share payable on the 04 October 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 12 September 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 CITIC’s most recent financial data to examine its dividend characteristics in more detail.

Check out our latest analysis for CITIC

5 questions I ask before picking a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is it paying an annual yield above 75% of dividend payers?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

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

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

• Will it be able to continue to payout at the current rate in the future?

SEHK:267 Historical Dividend Yield September 7th 18

Does CITIC pass our checks?

The current trailing twelve-month payout ratio for the stock is 27.5%, which means that the dividend is covered by earnings. Going forward, analysts expect 267’s payout to remain around the same level at 25.2% of its earnings, which leads to a dividend yield of 4.0%. Furthermore, EPS should increase to HK$2.04.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from CITIC fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.

Compared to its peers, CITIC has a yield of 3.6%, which is high for Industrials stocks but still below the market’s top dividend payers.

Next Steps:

If CITIC is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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 key aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 267’s future growth? Take a look at our free research report of analyst consensus for 267’s outlook.

2. Historical Performance: What has 267’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 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.