Huaxia Eye Hospital GroupLtd's (SZSE:301267) Dividend Is Being Reduced To CN¥0.11

Huaxia Eye Hospital Group Co.,Ltd. (SZSE:301267) has announced that on 15th of July, it will be paying a dividend ofCN¥0.11, which a reduction from last year's comparable dividend. This means that the annual payment is 0.5% of the current stock price, which is lower than what the rest of the industry is paying.

Check out our latest analysis for Huaxia Eye Hospital GroupLtd

Huaxia Eye Hospital GroupLtd's Dividend Is Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Huaxia Eye Hospital GroupLtd was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 19.6% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 11% by next year, which is in a pretty sustainable range.

Huaxia Eye Hospital GroupLtd Doesn't Have A Long Payment History

It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. 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.

The Dividend Looks Likely To Grow

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. Huaxia Eye Hospital GroupLtd has seen EPS rising for the last five years, at 30% per annum. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Huaxia Eye Hospital GroupLtd Looks Like A Great Dividend Stock

Overall, we think that Huaxia Eye Hospital GroupLtd could be a great option for a dividend investment, although we would have preferred if the dividend wasn't cut this year. The cut will allow the company to continue paying out the dividend without putting the balance sheet under pressure, which means that it could remain sustainable for longer. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 Huaxia Eye Hospital GroupLtd analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Huaxia Eye Hospital GroupLtd not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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