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UMP Healthcare Holdings (HKG:722) Is Due To Pay A Dividend Of HK$0.019

Simply Wall St · 2d ago

The board of UMP Healthcare Holdings Limited (HKG:722) has announced that it will pay a dividend on the 9th of January, with investors receiving HK$0.019 per share. This means the annual payment is 6.8% of the current stock price, which is above the average for the industry.

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UMP Healthcare Holdings' Projections Indicate Future Payments May Be Unsustainable

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, UMP Healthcare Holdings' dividend made up quite a large proportion of earnings but only 17% of free cash flows. This leaves plenty of cash for reinvestment into the business.

If the company can't turn things around, EPS could fall by 12.8% over the next year. Assuming the dividend continues along recent trends, we believe the payout ratio could reach 102%, which could put the dividend under pressure if earnings don't start to improve.

historic-dividend
SEHK:722 Historic Dividend December 8th 2025

Check out our latest analysis for UMP Healthcare Holdings

UMP Healthcare Holdings' Dividend Has Lacked Consistency

It's comforting to see that UMP Healthcare Holdings has been paying a dividend for a number of years now, however it has been cut at least once in that time. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The annual payment during the last 9 years was HK$0.02 in 2016, and the most recent fiscal year payment was HK$0.033. This implies that the company grew its distributions at a yearly rate of about 5.7% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

The Dividend Has Limited Growth Potential

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Earnings per share has been sinking by 13% over the last five years. Dividend payments are likely to come under some pressure unless EPS can pull out of the nosedive it is in.

Our Thoughts On UMP Healthcare Holdings' Dividend

Overall, the dividend looks like it may have been a bit high, which explains why it has now been cut. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. We would be a touch cautious of relying on this stock primarily for the dividend income.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Case in point: We've spotted 3 warning signs for UMP Healthcare Holdings (of which 1 is a bit unpleasant!) you should know about. Is UMP Healthcare Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.