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Shenzhou International Group Holdings Limited (HKG:2313) is about to trade ex-dividend in the next 3 days. You will need to purchase shares before the 6th of September to receive the dividend, which will be paid on the 26th of September.
Shenzhou International Group Holdings's next dividend payment will be CN¥0.90 per share, and in the last 12 months, the company paid a total of CN¥1.58 per share. Last year's total dividend payments show that Shenzhou International Group Holdings has a trailing yield of 1.6% on the current share price of HK$106.5. 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! As a result, readers should always check whether Shenzhou International Group Holdings has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Shenzhou International Group Holdings
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Shenzhou International Group Holdings paid out more than half (51%) of its earnings last year, which is a regular payout ratio for most companies. A useful secondary check can be to evaluate whether Shenzhou International Group Holdings generated enough free cash flow to afford its dividend. Over the last year, it paid out more than three-quarters (84%) of its free cash flow generated, which is fairly high and may be starting to limit reinvestment in the business.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Shenzhou International Group Holdings's earnings per share have risen 19% per annum over the last five years. It paid out more than three-quarters of its earnings in the last year, even though earnings per share are growing rapidly. Higher earnings generally bode well for growing dividends, although with seemingly strong growth prospects we'd wonder why management are not reinvesting more in the business.