Inner Mongolia Xingye Silver &Tin Mining Co.,Ltd (SZSE:000426) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Inner Mongolia Xingye Silver &Tin Mining Co.,Ltd (SZSE:000426) stock is about to trade ex-dividend in four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled 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, Inner Mongolia Xingye Silver &Tin MiningLtd investors that purchase the stock on or after the 9th of July will not receive the dividend, which will be paid on the 9th of July.

The company's next dividend payment will be CN¥0.065 per share. Last year, in total, the company distributed CN¥0.065 to shareholders. Based on the last year's worth of payments, Inner Mongolia Xingye Silver &Tin MiningLtd has a trailing yield of 0.5% on the current stock price of CN¥13.37. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for Inner Mongolia Xingye Silver &Tin MiningLtd

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Inner Mongolia Xingye Silver &Tin MiningLtd paid out just 10% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether Inner Mongolia Xingye Silver &Tin MiningLtd generated enough free cash flow to afford its dividend. The good news is it paid out just 16% of its free cash flow in the last year.

It's positive to see that Inner Mongolia Xingye Silver &Tin MiningLtd's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

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

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Inner Mongolia Xingye Silver &Tin MiningLtd has grown its earnings rapidly, up 73% a year for the past five years. Inner Mongolia Xingye Silver &Tin MiningLtd looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Inner Mongolia Xingye Silver &Tin MiningLtd has increased its dividend at approximately 15% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

Final Takeaway

Has Inner Mongolia Xingye Silver &Tin MiningLtd got what it takes to maintain its dividend payments? It's great that Inner Mongolia Xingye Silver &Tin MiningLtd is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. There's a lot to like about Inner Mongolia Xingye Silver &Tin MiningLtd, and we would prioritise taking a closer look at it.

Ever wonder what the future holds for Inner Mongolia Xingye Silver &Tin MiningLtd? See what the two analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

If you're in the market for strong dividend payers, we recommend checking 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com