Don't Buy Ningbo Fubang Jingye Group Co.,Ltd (SHSE:600768) For Its Next Dividend Without Doing These Checks

Ningbo Fubang Jingye Group Co.,Ltd (SHSE:600768) is about to trade ex-dividend in the next two days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Meaning, you will need to purchase Ningbo Fubang Jingye GroupLtd's shares before the 9th of January to receive the dividend, which will be paid on the 9th of January.

The upcoming dividend for Ningbo Fubang Jingye GroupLtd is CN¥0.10 per share. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Ningbo Fubang Jingye GroupLtd can afford its dividend, and if the dividend could grow.

See our latest analysis for Ningbo Fubang Jingye GroupLtd

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Ningbo Fubang Jingye GroupLtd distributed an unsustainably high 124% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious.

Click here to see how much of its profit Ningbo Fubang Jingye GroupLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Ningbo Fubang Jingye GroupLtd earnings per share are up 7.3% per annum over the last five years.

This is Ningbo Fubang Jingye GroupLtd's first year of paying a regular dividend, which is exciting for shareholders - but it does mean there's no dividend history to examine.

The Bottom Line

From a dividend perspective, should investors buy or avoid Ningbo Fubang Jingye GroupLtd? While we like that its earnings are growing somewhat, we're not enamored that it's paying out 124% of last year's earnings. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

So if you want to do more digging on Ningbo Fubang Jingye GroupLtd, you'll find it worthwhile knowing the risks that this stock faces. Our analysis shows 3 warning signs for Ningbo Fubang Jingye GroupLtd that we strongly recommend you have a look at before investing in the company.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.