Only Three Days Left To Cash In On Northern United Publishing & Media (Group)'s (SHSE:601999) Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Northern United Publishing & Media (Group) Company Limited (SHSE:601999) is about to go ex-dividend in just 3 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Northern United Publishing & Media (Group)'s shares on or after the 16th of August will not receive the dividend, which will be paid on the 16th of August.

The company's next dividend payment will be CN¥0.062 per share, on the back of last year when the company paid a total of CN¥0.062 to shareholders. Based on the last year's worth of payments, Northern United Publishing & Media (Group) has a trailing yield of 1.2% on the current stock price of CN¥5.34. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Northern United Publishing & Media (Group)

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Northern United Publishing & Media (Group) paid out a comfortable 37% of its profit last year. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Luckily it paid out just 21% of its free cash flow last year.

It's positive to see that Northern United Publishing & Media (Group)'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 how much of its profit Northern United Publishing & Media (Group) paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. 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 discomforted by Northern United Publishing & Media (Group)'s 9.2% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Northern United Publishing & Media (Group) has delivered an average of 4.7% per year annual increase in its dividend, based on the past 10 years of dividend payments.

Final Takeaway

Has Northern United Publishing & Media (Group) got what it takes to maintain its dividend payments? Northern United Publishing & Media (Group) has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Northern United Publishing & Media (Group)'s dividend merits.

So while Northern United Publishing & Media (Group) looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Our analysis shows 3 warning signs for Northern United Publishing & Media (Group) that we strongly recommend you have a look at before investing in the company.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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

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.