Beijing Chunlizhengda Medical Instruments Co., Ltd.'s (HKG:1858) dividend will be increasing from last year's payment of the same period to CN¥0.397 on 31st of July. This takes the dividend yield to 4.5%, which shareholders will be pleased with.
See our latest analysis for Beijing Chunlizhengda Medical Instruments
Beijing Chunlizhengda Medical Instruments' Earnings Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained. The last dividend was quite easily covered by Beijing Chunlizhengda Medical Instruments' earnings. This means that a large portion of its earnings are being retained to grow the business.
Over the next year, EPS is forecast to expand by 97.6%. If the dividend continues on this path, the payout ratio could be 36% by next year, which we think can be pretty sustainable going forward.
Beijing Chunlizhengda Medical Instruments Is Still Building Its Track Record
Beijing Chunlizhengda Medical Instruments' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2015, the dividend has gone from CN¥0.0176 total annually to CN¥0.362. This implies that the company grew its distributions at a yearly rate of about 40% over that duration. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Beijing Chunlizhengda Medical Instruments has impressed us by growing EPS at 13% per year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
Beijing Chunlizhengda Medical Instruments Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Beijing Chunlizhengda Medical Instruments is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Beijing Chunlizhengda Medical Instruments that investors should take into consideration. Is Beijing Chunlizhengda Medical Instruments not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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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