Regina Miracle International (Holdings) Limited (HKG:2199) Will Pay A HK$0.043 Dividend In Four Days
It looks like Regina Miracle International (Holdings) Limited (HKG:2199) is about to go ex-dividend in the next four days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Regina Miracle International (Holdings)'s shares on or after the 8th of September will not receive the dividend, which will be paid on the 8th of October.
The company's next dividend payment will be HK$0.043 per share, on the back of last year when the company paid a total of HK$0.068 to shareholders. Looking at the last 12 months of distributions, Regina Miracle International (Holdings) has a trailing yield of approximately 3.0% on its current stock price of HK$2.26. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see Regina Miracle International (Holdings) paying out a modest 45% of its earnings. A useful secondary check can be to evaluate whether Regina Miracle International (Holdings) generated enough free cash flow to afford its dividend. The good news is it paid out just 7.0% of its free cash flow in the last year.
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.
See our latest analysis for Regina Miracle International (Holdings)
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're discomforted by Regina Miracle International (Holdings)'s 8.7% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past nine years, Regina Miracle International (Holdings) has increased its dividend at approximately 2.2% a year on average.
Final Takeaway
Has Regina Miracle International (Holdings) got what it takes to maintain its dividend payments? Regina Miracle International (Holdings) has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Regina Miracle International (Holdings)'s dividend merits.
So while Regina Miracle International (Holdings) looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. We've identified 3 warning signs with Regina Miracle International (Holdings) (at least 1 which is concerning), and understanding them should be part of your investment process.
If you're in the market for strong dividend payers, we recommend checking our selection of top 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.