Qingdao NovelBeam Technology Co.,Ltd. (SHSE:688677) Passed Our Checks, And It's About To Pay A CN¥0.55 Dividend

Readers hoping to buy Qingdao NovelBeam Technology Co.,Ltd. (SHSE:688677) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a 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. Accordingly, Qingdao NovelBeam TechnologyLtd investors that purchase the stock on or after the 11th of June will not receive the dividend, which will be paid on the 11th of June.

The company's next dividend payment will be CN¥0.55 per share, and in the last 12 months, the company paid a total of CN¥0.55 per share. Last year's total dividend payments show that Qingdao NovelBeam TechnologyLtd has a trailing yield of 1.4% on the current share price of CN¥39.93. If you buy this business for its dividend, you should have an idea of whether Qingdao NovelBeam TechnologyLtd's dividend is reliable and sustainable. As a result, readers should always check whether Qingdao NovelBeam TechnologyLtd has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Qingdao NovelBeam TechnologyLtd

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. Qingdao NovelBeam TechnologyLtd paid out a comfortable 49% of its profit last year. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out more than half (59%) of its free cash flow in the past year, which is within an average range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Qingdao NovelBeam TechnologyLtd's earnings per share have been growing at 15% a year for the past five years. Qingdao NovelBeam TechnologyLtd is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. This is a reasonable combination that could hint at some further dividend increases in the future.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last three years, Qingdao NovelBeam TechnologyLtd has lifted its dividend by approximately 24% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Is Qingdao NovelBeam TechnologyLtd worth buying for its dividend? From a dividend perspective, we're encouraged to see that earnings per share have been growing, the company is paying out less than half of its earnings, and a bit over half its free cash flow. Overall we think this is an attractive combination and worthy of further research.

So while Qingdao NovelBeam TechnologyLtd looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Every company has risks, and we've spotted 1 warning sign for Qingdao NovelBeam TechnologyLtd you should know about.

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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.