Tianjin Chase Sun PharmaceuticalLtd (SZSE:300026) Has Announced A Dividend Of CN¥0.03

Tianjin Chase Sun Pharmaceutical Co.,Ltd (SZSE:300026) will pay a dividend of CN¥0.03 on the 23rd of May. This payment means the dividend yield will be 0.8%, which is below the average for the industry.

View our latest analysis for Tianjin Chase Sun PharmaceuticalLtd

Tianjin Chase Sun PharmaceuticalLtd's Earnings Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, prior to this announcement, Tianjin Chase Sun PharmaceuticalLtd's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 62.4% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 16%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of CN¥0.0148 in 2014 to the most recent total annual payment of CN¥0.03. This means that it has been growing its distributions at 7.3% per annum over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Tianjin Chase Sun PharmaceuticalLtd has seen EPS rising for the last five years, at 12% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Tianjin Chase Sun PharmaceuticalLtd Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Tianjin Chase Sun PharmaceuticalLtd might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 2 warning signs for Tianjin Chase Sun PharmaceuticalLtd that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.