A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. In the past 3 years China Cinda Asset Management Co Ltd. (SEHK:1359) has returned an average of 4.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at China Cinda Asset Management in more detail. View our latest analysis for China Cinda Asset Management

5 checks you should do on a dividend stock

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

• Is it the top 25% annual dividend yield payer?

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

• Has dividend per share amount increased over the past?

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

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

How does China Cinda Asset Management fare?

China Cinda Asset Management has a trailing twelve-month payout ratio of 27.72%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect 1359’s payout to remain around the same level at 29.33% of its earnings, which leads to a dividend yield of 7.05%. Furthermore, EPS should increase to CN¥0.5. 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 China Cinda Asset Management as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, China Cinda Asset Management generates a yield of 4.88%, which is high for Capital Markets stocks.

Next Steps:

With this in mind, I definitely rank China Cinda Asset Management 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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three pertinent aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for 1359’s future growth? Take a look at our free research report of analyst consensus for 1359’s outlook.

2. Valuation: What is 1359 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 1359 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.