Only Four Days Left To Cash In On National Electronics Holdings' (HKG:213) Dividend
National Electronics Holdings Limited (HKG:213) is about to trade 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. 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. This means that investors who purchase National Electronics Holdings' shares on or after the 2nd of September will not receive the dividend, which will be paid on the 22nd of September.
The company's next dividend payment will be HK$0.012 per share, and in the last 12 months, the company paid a total of HK$0.012 per share. Based on the last year's worth of payments, National Electronics Holdings has a trailing yield of 3.4% on the current stock price of HK$0.35. If you buy this business for its dividend, you should have an idea of whether National Electronics Holdings's dividend is reliable and sustainable. As a result, readers should always check whether National Electronics Holdings has been able to grow its dividends, or if the dividend might be cut.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately National Electronics Holdings's payout ratio is modest, at just 27% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Luckily it paid out just 0.2% of its free cash flow last year.
It's positive to see that National Electronics Holdings's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
See our latest analysis for National Electronics Holdings
Click here to see how much of its profit National Electronics Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by National Electronics Holdings's 17% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. National Electronics Holdings has seen its dividend decline 10% per annum on average over the past 10 years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.
Final Takeaway
From a dividend perspective, should investors buy or avoid National Electronics Holdings? National Electronics 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. In summary, while it has some positive characteristics, we're not inclined to race out and buy National Electronics Holdings today.
In light of that, while National Electronics Holdings has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 6 warning signs for National Electronics Holdings (1 doesn't sit too well with us!) that you ought to be aware of before buying the shares.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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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.