In This Article:
Yangzijiang Financial Holding Ltd. (SGX:YF8) stock is about to trade ex-dividend in three days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible 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. Meaning, you will need to purchase Yangzijiang Financial Holding's shares before the 24th of April to receive the dividend, which will be paid on the 15th of May.
The company's next dividend payment will be S$0.0345 per share, on the back of last year when the company paid a total of S$0.034 to shareholders. Based on the last year's worth of payments, Yangzijiang Financial Holding has a trailing yield of 5.0% on the current stock price of S$0.69. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Yangzijiang Financial Holding's payout ratio is modest, at just 40% of profit.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Check out our latest analysis for Yangzijiang Financial Holding
Click here to see how much of its profit Yangzijiang Financial Holding paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're not enthused to see that Yangzijiang Financial Holding's earnings per share have remained effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past two years, Yangzijiang Financial Holding has increased its dividend at approximately 38% a year on average.