Jiangsu Jinling Sports EquipmentLtd (SZSE:300651) Is Paying Out A Larger Dividend Than Last Year

Jiangsu Jinling Sports Equipment Co.,Ltd. (SZSE:300651) has announced that it will be increasing its dividend from last year's comparable payment on the 7th of June to CN¥0.15. Despite this raise, the dividend yield of 1.2% is only a modest boost to shareholder returns.

Check out our latest analysis for Jiangsu Jinling Sports EquipmentLtd

Jiangsu Jinling Sports EquipmentLtd's Payment Has Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. However, Jiangsu Jinling Sports EquipmentLtd's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS could expand by 13.9% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 24% by next year, which is in a pretty sustainable range.

Jiangsu Jinling Sports EquipmentLtd's Dividend Has Lacked Consistency

It's comforting to see that Jiangsu Jinling Sports EquipmentLtd has been paying a dividend for a number of years now, however it has been cut at least once in that time. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The dividend has gone from an annual total of CN¥0.165 in 2019 to the most recent total annual payment of CN¥0.15. Doing the maths, this is a decline of about 1.9% per year. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Jiangsu Jinling Sports EquipmentLtd has seen EPS rising for the last five years, at 14% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Jiangsu Jinling Sports EquipmentLtd Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Jiangsu Jinling Sports EquipmentLtd is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Jiangsu Jinling Sports EquipmentLtd that you should be aware of before investing. 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.