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Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6) has announced that it will be increasing its dividend from last year's comparable payment on the 13th of May to CN¥0.12. This will take the dividend yield to an attractive 5.6%, providing a nice boost to shareholder returns.
Yangzijiang Shipbuilding (Holdings)'s Payment Could Potentially Have Solid Earnings Coverage
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, Yangzijiang Shipbuilding (Holdings)'s earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Over the next year, EPS is forecast to expand by 44.9%. If the dividend continues along recent trends, we estimate the payout ratio will be 5.2%, which is in the range that makes us comfortable with the sustainability of the dividend.
View our latest analysis for Yangzijiang Shipbuilding (Holdings)
Yangzijiang Shipbuilding (Holdings) Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from CN¥0.223 total annually to CN¥0.647. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Yangzijiang Shipbuilding (Holdings) has impressed us by growing EPS at 16% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
Yangzijiang Shipbuilding (Holdings) Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 9 analysts we track are forecasting for Yangzijiang Shipbuilding (Holdings) for free with public analyst estimates for the company. 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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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.