Harbin Sayyas Windows (SZSE:301227) Will Pay A Smaller Dividend Than Last Year

Harbin Sayyas Windows Co., Ltd.'s (SZSE:301227) dividend is being reduced from last year's payment covering the same period to CN¥0.50 on the 28th of May. The dividend yield will be in the average range for the industry at 2.2%.

Check out our latest analysis for Harbin Sayyas Windows

Harbin Sayyas Windows' Payment Has Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Based on the last payment, Harbin Sayyas Windows was earning enough to cover the dividend, but free cash flows weren't positive. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.

The next year is set to see EPS grow by 69.2%. If the dividend continues along recent trends, we estimate the payout ratio will be 18%, which is in the range that makes us comfortable with the sustainability of the dividend.

Harbin Sayyas Windows Doesn't Have A Long Payment History

It's not possible for us to make a backward looking judgement just based on a short payment history. 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.

Harbin Sayyas Windows Could Grow Its Dividend

Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. We are encouraged to see that Harbin Sayyas Windows has grown earnings per share at 9.4% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Our Thoughts On Harbin Sayyas Windows' Dividend

Overall, it's not great to see that the dividend has been cut, but this might be explained by the payments being a bit high previously. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. Overall, we don't think this company has the makings of a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 2 warning signs for Harbin Sayyas Windows (of which 1 is concerning!) you should know about. Is Harbin Sayyas Windows not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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