China South Publishing & Media Group Co., Ltd (SHSE:601098) Pays A CN¥0.10 Dividend In Just One Day

China South Publishing & Media Group Co., Ltd (SHSE:601098) stock is about to trade ex-dividend in day or so. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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. This means that investors who purchase China South Publishing & Media Group's shares on or after the 16th of October will not receive the dividend, which will be paid on the 16th of October.

The company's next dividend payment will be CN¥0.10 per share, and in the last 12 months, the company paid a total of CN¥0.55 per share. Calculating the last year's worth of payments shows that China South Publishing & Media Group has a trailing yield of 4.2% on the current share price of CN¥13.18. If you buy this business for its dividend, you should have an idea of whether China South Publishing & Media Group's dividend is reliable and sustainable. So we need to investigate whether China South Publishing & Media Group can afford its dividend, and if the dividend could grow.

View our latest analysis for China South Publishing & Media Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. China South Publishing & Media Group paid out more than half (71%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution.

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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at China South Publishing & Media Group, with earnings per share up 6.0% on average over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. Therefore it's unlikely that the company will be able to reinvest heavily in its business, which could presage slower growth in the future.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, China South Publishing & Media Group has lifted its dividend by approximately 11% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Has China South Publishing & Media Group got what it takes to maintain its dividend payments? While earnings per share growth has been modest, China South Publishing & Media Group's dividend payouts are around an average level; without a sharp change in earnings we feel that the dividend is likely somewhat sustainable. Pleasingly the company paid out a conservatively low percentage of its free cash flow. To summarise, China South Publishing & Media Group looks okay on this analysis, although it doesn't appear a stand-out opportunity.

Curious what other investors think of China South Publishing & Media Group? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

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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.