Here's What We Like About Sichuan Tianwei ElectronicLtd's (SHSE:688511) Upcoming Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Sichuan Tianwei Electronic Co.,Ltd. (SHSE:688511) is about to go ex-dividend in just three days. The ex-dividend date is usually set to be one business day 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 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 Sichuan Tianwei ElectronicLtd's shares on or after the 12th of August will not receive the dividend, which will be paid on the 12th of August.

The company's next dividend payment will be CN¥0.375 per share, and in the last 12 months, the company paid a total of CN¥0.37 per share. Looking at the last 12 months of distributions, Sichuan Tianwei ElectronicLtd has a trailing yield of approximately 2.4% on its current stock price of CN¥15.36. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Sichuan Tianwei ElectronicLtd

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Sichuan Tianwei ElectronicLtd is paying out an acceptable 71% of its profit, a common payout level among most companies.

Click here to see how much of its profit Sichuan Tianwei ElectronicLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Sichuan Tianwei ElectronicLtd's earnings have been skyrocketing, up 25% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Sichuan Tianwei ElectronicLtd has seen its dividend decline 23% per annum on average over the past two years, which is not great to see. It's unusual to see earnings per share increasing at the same time as dividends per share have been in decline. We'd hope it's because the company is reinvesting heavily in its business, but it could also suggest business is lumpy.

To Sum It Up

Is Sichuan Tianwei ElectronicLtd worth buying for its dividend? Earnings per share are growing nicely, and Sichuan Tianwei ElectronicLtd is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Sichuan Tianwei ElectronicLtd ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

On that note, you'll want to research what risks Sichuan Tianwei ElectronicLtd is facing. Every company has risks, and we've spotted 4 warning signs for Sichuan Tianwei ElectronicLtd (of which 2 are a bit concerning!) you should know about.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.