Why It Might Not Make Sense To Buy Wharf Real Estate Investment Company Limited (HKG:1997) For Its Upcoming Dividend
It looks like Wharf Real Estate Investment Company Limited (HKG: 1997) is close to the ex-dividend in the next four days. Ex-dividend means that investors who buy the stock on or after March 24th will not receive this dividend, which will be paid on April 22nd.
Wharf Real Estate Investment’s upcoming dividend is HK $ 0.69 per share, following the last 12 months when the company paid a total of HK $ 1.47 per share to shareholders. Looking at the last 12 months of distributions, Wharf Real Estate Investment has a trailing return of approximately 3.3% on the current share price of HK $ 44.05. When buying this company for its dividend, you should have an idea of whether Wharf Real Estate Investment’s dividend is reliable and sustainable. Therefore, we should always check whether the dividend payments appear sustainable and whether the company is growing.
Check out our latest analysis for Wharf Real Estate Investment
Dividends are usually paid out of company income. So when a company pays out more than it earns, its dividend is usually at greater risk of being cut. Wharf Real Estate Investment posted a loss last year, so it’s not nice to see the company continue to pay a dividend.
Click here to view the company’s payout ratio and analyst estimates of future dividends.
SEHK: 1997 historic dividend March 19, 2021
Have profits and dividends grown?
Companies with declining earnings are difficult from a dividend perspective. If earnings plummet and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Wharf Real Estate Investment posted a loss over the past year, and the general trend suggests that earnings have also declined in recent years, so we wonder if the dividend is at risk.
Another important way to measure a company’s dividend prospects is by measuring its historical dividend growth rate. Since our data began three years ago, Wharf Real Estate Investment has increased its dividend an average of 16% per year.
Remember, you can always get an overview of Wharf Real Estate Investment’s financial health by checking out our Wharf Real Estate Investment Financial Health Visualization here.
The bottom line
Should investors buy Wharf Real Estate Investment for the upcoming dividend? These traits generally do not result in great dividend performance, and investors may not be happy with the results of owning this stock for their dividend.
With that in mind, however, it is worth considering the risks associated with this business if you don’t mind Wharf Real Estate Investment’s poor dividend properties. Case in point: we have discovered 1 warning sign for Wharf Real Estate Investment You should be aware of this.
A common investment mistake is buying the first interesting stock you see. Here is a list of promising dividend stocks with a yield greater than 2% and an upcoming dividend.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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