Should You Buy Le Saunda Holdings Limited (HKG:738) For Its Dividend?

Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Over the past 10 years, Le Saunda Holdings Limited (HKG:738) has returned an average of 7.00% per year to shareholders in terms of dividend yield. Does Le Saunda Holdings tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View out our latest analysis for Le Saunda Holdings

Here’s how I find good dividend stocks

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

• 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?

• Is its earnings sufficient to payout dividend at the current rate?

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

SEHK:738 Historical Dividend Yield June 27th 18

How does Le Saunda Holdings fare?

The company currently pays out 66.00% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. 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, Le Saunda Holdings generates a yield of 10.00%, which is high for Luxury stocks.

Next Steps:

With this in mind, I definitely rank Le Saunda Holdings as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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. There are three key factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for 738’s future growth? Take a look at our free research report of analyst consensus for 738’s outlook.

2. Valuation: What is 738 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 738 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.