MicroPort NeuroScientific Corporation (HKG:2172) will pay a dividend of CN¥0.11 on the 22nd of August. This payment means the dividend yield will be 1.9%, which is below the average for the industry.
MicroPort NeuroScientific's Payment Could Potentially Have Solid Earnings Coverage
Even a low dividend yield can be attractive if it is sustained for years on end. The last dividend was quite easily covered by MicroPort NeuroScientific's earnings. This means that a large portion of its earnings are being retained to grow the business.
The next year is set to see EPS grow by 22.5%. Assuming the dividend continues along recent trends, we think the payout ratio could be 35% by next year, which is in a pretty sustainable range.
View our latest analysis for MicroPort NeuroScientific
MicroPort NeuroScientific Is Still Building Its Track Record
It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. MicroPort NeuroScientific has impressed us by growing EPS at 32% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that MicroPort NeuroScientific could prove to be a strong dividend payer.
MicroPort NeuroScientific Looks Like A Great Dividend Stock
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend 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. See if management have their own wealth at stake, by checking insider shareholdings in MicroPort NeuroScientific stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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