China Mobile Limited (CHL) is an investment holding company. The company and its subsidiaries provide mobile telecommunications services to about 700 million customers in China and Hong Kong.
Last month I completed a stock analysis of CHL when it was trading at $51.28 per share. At the time, I didn't have enough cash to purchase shares of CHL. But with a recent bonus deposit and CHL reappearing on my dashboard of top dividend growth candidates, I'm ready to invest in CHL.
Analysis Update
At my purchase price of $53.27, CHL's annual dividend of $2.18 yields 4.09%. Over the past 10 years, CHL has outperformed the markets with a return of 461% compared to 76% for both the S&P 500 and the Dow Jones.
CHL has a 5-year dividend growth rate of 14.16%. Fair value estimates are $58.90 (Graham Number method) and $60.00 (MorningStar). My purchase price represents a discount of about 10% to the average of these estimates ($59.45).
The following table provides some key statistics for CHL, with highlighted values relating to my selection criteria:
In addition to the above-mentioned, CHL passes these selection criteria:
I now own shares in 11 different companies in DivGro.
Full Disclosure: Long CHL
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- Sum of dividend yield (4.09%) and 5-yr dividend CAGR (14.16%) is 18.25% (Chowder Dividend Rule)
- EPS% Payout ratio is 42.04% (below 65%)
- Debt to Equity ratio is 0% (below 50%)
- 7-year weighted average dividend growth rate is 13.35% (at least 7%)
- 5-yr total payback percentage is 22.01% (at least 16%)
My confidence in CHL's ability to continue with dividend increases is moderate. Except for this point, CHL passes all my selection criteria and earns 7 stars: (*******)
Other ratings for CHL
| S&P Capital IQ's Stock Report | (*****)Hold |
| MorningStar Rating | (*****) |
| The Motley Fool's CAPS Rating | (*****) |
Final Remarks
47 shares of CHL represents $102.35 of expected annual dividend income. Forward 12-month projected dividend income is $1,248.52. For the 2013 calendar year, this purchase adds about $44.65 of expected dividend income, for a total of $1030.87 for 2013.I now own shares in 11 different companies in DivGro.
Full Disclosure: Long CHL
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