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China Cinda Asset Management Co., Ltd. (HKG:1359) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day before a company’s record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase China Cinda Asset Management’s shares on or after the 30th of June, you won’t be eligible to receive the dividend, when it is paid on the 1st of January.
The company’s next dividend payment will be CN¥0.095 per share. Last year, in total, the company distributed CN¥0.095 to shareholders. Looking at the last 12 months of distributions, China Cinda Asset Management has a trailing yield of approximately 8.4% on its current stock price of HK$1.32. We love seeing companies pay a dividend, but it’s also important to be sure that laying the golden eggs isn’t going to kill our golden goose! So we need to check whether the dividend payments are covered, and if earnings are growing.
View our latest analysis for China Cinda Asset Management
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. That’s why it’s good to see China Cinda Asset Management paying out a modest 33% of its earnings.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Readers will understand then, why we’re concerned to see China Cinda Asset Management’s earnings per share have dropped 7.5% a year over the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. China Cinda Asset Management has seen its dividend decline 0.5% per annum on average over the past seven years, which is not great to see.
Final Takeaway
Has China Cinda Asset Management got what it takes to maintain its dividend payments? China Cinda Asset Management’s earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It doesn’t appear an outstanding opportunity, but could be worth a closer look.
If you want to look further into China Cinda Asset Management, it’s worth knowing the risks this business faces. To help with this, we’ve discovered 2 warning signs for China Cinda Asset Management (1 shouldn’t be ignored!) that you ought to be aware of before buying the shares.
Generally, we wouldn’t recommend just buying the first dividend stock you see. Here’s a curated list of interesting stocks that are strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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