Do These 3 Checks Before Buying Guangdong Brandmax Marketing Co.,Ltd. (SZSE:300805) For Its Upcoming 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 Guangdong Brandmax Marketing Co.,Ltd. (SZSE:300805) is about to go ex-dividend in just 2 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase Guangdong Brandmax MarketingLtd's shares before the 8th of July in order to receive the dividend, which the company will pay on the 8th of July.

The company's next dividend payment will be CN¥0.04 per share, and in the last 12 months, the company paid a total of CN¥0.04 per share. Last year's total dividend payments show that Guangdong Brandmax MarketingLtd has a trailing yield of 0.7% on the current share price of CN¥6.07. If you buy this business for its dividend, you should have an idea of whether Guangdong Brandmax MarketingLtd's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Guangdong Brandmax MarketingLtd

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Guangdong Brandmax MarketingLtd is paying out an acceptable 50% of its profit, a common payout level among most companies.

Click here to see how much of its profit Guangdong Brandmax MarketingLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Guangdong Brandmax MarketingLtd's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 31% a year over the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Guangdong Brandmax MarketingLtd has seen its dividend decline 20% per annum on average over the past four years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

To Sum It Up

Is Guangdong Brandmax MarketingLtd worth buying for its dividend? Earnings per share have been declining and the company is paying out more than half its profits to shareholders; not an enticing combination. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.

If you're not too concerned about Guangdong Brandmax MarketingLtd's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Our analysis shows 2 warning signs for Guangdong Brandmax MarketingLtd that we strongly recommend you have a look at before investing in the company.

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