Is It Worth Considering Oi Wah Pawnshop Credit Holdings Limited (HKG:1319) For Its Upcoming Dividend?
It looks like Oi Wah Pawnshop Credit Holdings Limited (HKG:1319) is about to go ex-dividend in the next 4 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase Oi Wah Pawnshop Credit Holdings' shares before the 9th of November in order to receive the dividend, which the company will pay on the 26th of November.
The company's next dividend payment will be HK$0.014 per share, and in the last 12 months, the company paid a total of HK$0.028 per share. Calculating the last year's worth of payments shows that Oi Wah Pawnshop Credit Holdings has a trailing yield of 9.5% on the current share price of HK$0.295. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Oi Wah Pawnshop Credit Holdings can afford its dividend, and if the dividend could grow.
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. Oi Wah Pawnshop Credit Holdings paid out more than half (50%) of its earnings last year, which is a regular payout ratio for most companies.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
View our latest analysis for Oi Wah Pawnshop Credit Holdings
Click here to see how much of its profit Oi Wah Pawnshop Credit Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings fall far enough, the company could be forced to cut its dividend. It's not encouraging to see that Oi Wah Pawnshop Credit Holdings's earnings are effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Oi Wah Pawnshop Credit Holdings has lifted its dividend by approximately 8.0% a year on average.
The Bottom Line
Should investors buy Oi Wah Pawnshop Credit Holdings for the upcoming dividend? Oi Wah Pawnshop Credit Holdings has been struggling to generate growth while also paying out more than half of its earnings to shareholders as dividends. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.
However if you're still interested in Oi Wah Pawnshop Credit Holdings as a potential investment, you should definitely consider some of the risks involved with Oi Wah Pawnshop Credit Holdings. To that end, you should learn about the 3 warning signs we've spotted with Oi Wah Pawnshop Credit Holdings (including 1 which is a bit unpleasant).
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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