Income Investors Should Know That Easy Click Worldwide Network Technology Co., Ltd. (SZSE:301171) Goes Ex-Dividend Soon

It looks like Easy Click Worldwide Network Technology Co., Ltd. (SZSE:301171) is about to go ex-dividend in the next 4 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. 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. Meaning, you will need to purchase Easy Click Worldwide Network Technology's shares before the 29th of May to receive the dividend, which will be paid on the 29th of May.

The company's upcoming dividend is CN¥0.11 a share, following on from the last 12 months, when the company distributed a total of CN¥0.11 per share to shareholders. Based on the last year's worth of payments, Easy Click Worldwide Network Technology has a trailing yield of 0.7% on the current stock price of CN¥15.71. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Easy Click Worldwide Network Technology

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Easy Click Worldwide Network Technology is paying out just 23% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 12% of its cash flow last year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Easy Click Worldwide Network Technology paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. 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 not enthused to see that Easy Click Worldwide Network Technology's earnings per share have remained effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.

Unfortunately Easy Click Worldwide Network Technology has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

The Bottom Line

Is Easy Click Worldwide Network Technology an attractive dividend stock, or better left on the shelf? While it's not great to see that earnings per share are effectively flat over the one-year period we checked, at least the payout ratios are low and conservative. Overall, it's hard to get excited about Easy Click Worldwide Network Technology from a dividend perspective.

So while Easy Click Worldwide Network Technology looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Our analysis shows 2 warning signs for Easy Click Worldwide Network Technology and you should be aware of them before buying any shares.

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.

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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.