Shandong Xinjufeng Technology Packaging (SZSE:301296) Is Increasing Its Dividend To CN¥0.0534

The board of Shandong Xinjufeng Technology Packaging Co., Ltd. (SZSE:301296) has announced that it will be paying its dividend of CN¥0.0534 on the 4th of July, an increased payment from last year's comparable dividend. Even though the dividend went up, the yield is still quite low at only 0.7%.

See our latest analysis for Shandong Xinjufeng Technology Packaging

Shandong Xinjufeng Technology Packaging's Earnings Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. However, Shandong Xinjufeng Technology Packaging'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 32.8% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 9.3%, which is in the range that makes us comfortable with the sustainability of the dividend.

Shandong Xinjufeng Technology Packaging Doesn't Have A Long Payment History

It's not possible for us to make a backward looking judgement just based on a short payment history. 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

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Shandong Xinjufeng Technology Packaging has grown earnings per share at 12% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Shandong Xinjufeng Technology Packaging's Dividend

Overall, a dividend increase is always good, and we think that Shandong Xinjufeng Technology Packaging is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Shandong Xinjufeng Technology Packaging that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated 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.

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