Guangdong Lvtong New Energy Electric Vehicle Technology (SZSE:301322) Is Paying Out A Larger Dividend Than Last Year

Guangdong Lvtong New Energy Electric Vehicle Technology Co., LTD's (SZSE:301322) dividend will be increasing from last year's payment of the same period to CN¥1.00 on 29th of May. This will take the dividend yield to an attractive 6.0%, providing a nice boost to shareholder returns.

See our latest analysis for Guangdong Lvtong New Energy Electric Vehicle Technology

Guangdong Lvtong New Energy Electric Vehicle Technology's Dividend Is Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained. Before making this announcement, Guangdong Lvtong New Energy Electric Vehicle Technology was paying out quite a large proportion of both earnings and cash flow, with the dividend being 568% of cash flows. This is certainly a risk factor, as reduced cash flows could force the company to pay a lower dividend.

Earnings per share is forecast to rise by 30.1% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could reach 84%, which is on the higher side, but certainly still feasible.

Guangdong Lvtong New Energy Electric Vehicle Technology Is Still Building Its Track Record

It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

Guangdong Lvtong New Energy Electric Vehicle Technology's Dividend Might Lack Growth

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Guangdong Lvtong New Energy Electric Vehicle Technology has grown earnings per share at 44% per year over the past five years. Fast growing earnings are great, but this can rarely be sustained without some reinvestment into the business, which Guangdong Lvtong New Energy Electric Vehicle Technology hasn't been doing.

The Dividend Could Prove To Be Unreliable

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. Strong earnings growth means Guangdong Lvtong New Energy Electric Vehicle Technology has the potential to be a good dividend stock in the future, despite the current payments being at elevated levels. We don't think Guangdong Lvtong New Energy Electric Vehicle Technology is a great stock to add to your portfolio if income is your focus.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 2 warning signs for Guangdong Lvtong New Energy Electric Vehicle Technology you should be aware of, and 1 of them is potentially serious. Looking for more high-yielding dividend ideas? Try our collection of 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.