Ningbo Joy Intelligent Logistics TechnologyLtd (SZSE:301198) Is Paying Out Less In Dividends Than Last Year

Ningbo Joy Intelligent Logistics Technology Co.,Ltd. (SZSE:301198) has announced that on 28th of May, it will be paying a dividend ofCN¥0.12, which a reduction from last year's comparable dividend. This payment takes the dividend yield to 1.4%, which only provides a modest boost to overall returns.

View our latest analysis for Ningbo Joy Intelligent Logistics TechnologyLtd

Ningbo Joy Intelligent Logistics TechnologyLtd's Dividend Is Well Covered By Earnings

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Before making this announcement, Ningbo Joy Intelligent Logistics TechnologyLtd was earning enough to cover the dividend, but it wasn't generating any free cash flows. No cash flows could definitely make returning cash to shareholders difficult, or at least mean the balance sheet will come under pressure.

Over the next year, EPS is forecast to expand by 57.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 41%, which is in the range that makes us comfortable with the sustainability of the dividend.

Ningbo Joy Intelligent Logistics TechnologyLtd's Dividend Has Lacked Consistency

The track record isn't the longest, but we are already seeing a bit of instability in the payments. The dividend has gone from an annual total of CN¥0.178 in 2022 to the most recent total annual payment of CN¥0.12. This works out to a decline of approximately 32% over that time. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.

The Dividend Has Limited Growth Potential

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Earnings per share has been sinking by 19% over the last five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. Over the next year, however, earnings are actually predicted to rise, but we would still be cautious until a track record of earnings growth can be built.

Ningbo Joy Intelligent Logistics TechnologyLtd's Dividend Doesn't Look Sustainable

Overall, it's not great to see that the dividend has been cut, but this might be explained by the payments being a bit high previously. While Ningbo Joy Intelligent Logistics TechnologyLtd is earning enough to cover the payments, the cash flows are lacking. This company is not in the top tier of income providing stocks.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 4 warning signs for Ningbo Joy Intelligent Logistics TechnologyLtd (1 is concerning!) that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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