Yahoo Finance Should Geely Automobile Holdings Limited (HKG:175) Be Part Of Your Portfolio?
Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Over the past 10 years, Geely Automobile Holdings Limited (HKG:175) has returned an average of 1.00% per year to shareholders in terms of dividend yield. Let’s dig deeper into whether Geely Automobile Holdings should have a place in your portfolio.
Check out our latest analysis for Geely Automobile Holdings
5 questions to ask before buying a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Does it pay an annual yield higher than 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 its earnings sufficient to payout dividend at the current rate?
Will it be able to continue to payout at the current rate in the future?
How well does Geely Automobile Holdings fit our criteria?
The current trailing twelve-month payout ratio for the stock is 20.29%, which means that the dividend is covered by earnings. Going forward, analysts expect 175’s payout to increase to 23.63% of its earnings, which leads to a dividend yield of around 3.15%. Moreover, EPS should increase to CN¥1.54. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
Compared to its peers, Geely Automobile Holdings generates a yield of 1.74%, which is on the low-side for Auto stocks.
Next Steps:
If you are building an income portfolio, then Geely Automobile Holdings is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three key aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for 175’s future growth? Take a look at our free research report of analyst consensus for 175’s outlook.
Valuation: What is 175 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 175 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.