The board of Mingyue Optical Lens Co.,Ltd. (SZSE:301101) has announced that it will pay a dividend of CN¥0.30 per share on the 28th of May. Including this payment, the dividend yield on the stock will be 1.1%, which is a modest boost for shareholders' returns.
See our latest analysis for Mingyue Optical LensLtd
Mingyue Optical LensLtd's Earnings Easily Cover The Distributions
If it is predictable over a long period, even low dividend yields can be attractive. However, Mingyue Optical LensLtd's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Looking forward, earnings per share is forecast to rise by 68.8% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 22%, which is in the range that makes us comfortable with the sustainability of the dividend.
Mingyue Optical LensLtd's Dividend Has Lacked Consistency
Looking back, the company hasn't been paying the most consistent dividend, but with such a short dividend history it could be too early to draw solid conclusions. The dividend has gone from an annual total of CN¥0.353 in 2022 to the most recent total annual payment of CN¥0.30. This works out to be a decline of approximately 7.9% per year over that time. 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
Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Mingyue Optical LensLtd has impressed us by growing EPS at 27% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.
We Really Like Mingyue Optical LensLtd's Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Mingyue Optical LensLtd that you should be aware of before investing. Is Mingyue Optical LensLtd not quite the opportunity you were looking for? Why not check out our selection of top 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.
About SZSE:301101
Mingyue Optical LensLtd
Engages in research, development, design, and production of lenses, lens raw materials, finished mirrors, frames, and other products in China.
Flawless balance sheet with acceptable track record.
