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Golden Throat Holdings Group's (HKG:6896) Dividend Will Be Reduced To CN¥0.50

Simply Wall St · 06/02 23:15

Golden Throat Holdings Group Company Limited (HKG:6896) has announced that on 26th of June, it will be paying a dividend ofCN¥0.50, which a reduction from last year's comparable dividend. The yield is still above the industry average at 9.4%.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Golden Throat Holdings Group's stock price has increased by 67% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

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Golden Throat Holdings Group's Projections Indicate Future Payments May Be Unsustainable

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, the company's dividend was higher than its profits, and made up 83% of cash flows. While the cash payout ratio isn't necessarily a cause for concern, the company is probably focusing more on returning cash to shareholders than growing the business.

Over the next year, EPS could expand by 13.7% if the company continues along the path it has been on recently. If the dividend continues on its recent course, the payout ratio in 12 months could be 127%, which is a bit high and could start applying pressure to the balance sheet.

historic-dividend
SEHK:6896 Historic Dividend June 2nd 2025

View our latest analysis for Golden Throat Holdings Group

Golden Throat Holdings Group's Dividend Has Lacked Consistency

Golden Throat Holdings Group has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. Since 2016, the annual payment back then was CN¥0.0499, compared to the most recent full-year payment of CN¥0.458. This means that it has been growing its distributions at 28% per annum over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

Golden Throat Holdings Group Might Find It Hard To Grow Its Dividend

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that Golden Throat Holdings Group has grown earnings per share at 14% per year over the past five years. Although per-share earnings are growing at a credible rate, the massive payout ratio may limit growth in the company's future dividend payments.

The Dividend Could Prove To Be Unreliable

Overall, the dividend looks like it may have been a bit high, which explains why it has now been cut. Strong earnings growth means Golden Throat Holdings Group has the potential to be a good dividend stock in the future, despite the current payments being at elevated levels. Overall, we don't think this company has the makings of a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 Golden Throat Holdings Group that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.