Should Income Investors Look At Beijing Hotgen Biotech Co., Ltd. (SHSE:688068) Before Its Ex-Dividend?

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Beijing Hotgen Biotech Co., Ltd. (SHSE:688068) is about to trade ex-dividend in the next 2 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Beijing Hotgen Biotech's shares before the 3rd of July in order to be eligible for the dividend, which will be paid on the 3rd of July.

The company's next dividend payment will be CN¥0.20 per share. Last year, in total, the company distributed CN¥0.20 to shareholders. Last year's total dividend payments show that Beijing Hotgen Biotech has a trailing yield of 0.8% on the current share price of CN¥25.83. If you buy this business for its dividend, you should have an idea of whether Beijing Hotgen Biotech'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.

Check out our latest analysis for Beijing Hotgen Biotech

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Beijing Hotgen Biotech paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run.

Click here to see how much of its profit Beijing Hotgen Biotech paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Beijing Hotgen Biotech was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the Beijing Hotgen Biotech dividends are largely the same as they were four years ago.

We update our analysis on Beijing Hotgen Biotech every 24 hours, so you can always get the latest insights on its financial health, here.

To Sum It Up

Is Beijing Hotgen Biotech an attractive dividend stock, or better left on the shelf? It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you're not too concerned about Beijing Hotgen Biotech's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Case in point: We've spotted 1 warning sign for Beijing Hotgen Biotech you should be aware of.

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