Why You Might Be Interested In Tianjin Ringpu Bio-Technology Co.,Ltd. (SZSE:300119) For Its Upcoming Dividend

Tianjin Ringpu Bio-Technology Co.,Ltd. (SZSE:300119) is about to trade ex-dividend in the next 4 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible 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. Meaning, you will need to purchase Tianjin Ringpu Bio-TechnologyLtd's shares before the 15th of May to receive the dividend, which will be paid on the 15th of May.

The company's next dividend payment will be CN¥0.40 per share, on the back of last year when the company paid a total of CN¥0.40 to shareholders. Looking at the last 12 months of distributions, Tianjin Ringpu Bio-TechnologyLtd has a trailing yield of approximately 2.3% on its current stock price of CN¥17.22. If you buy this business for its dividend, you should have an idea of whether Tianjin Ringpu Bio-TechnologyLtd's dividend is reliable and sustainable. So we need to investigate whether Tianjin Ringpu Bio-TechnologyLtd can afford its dividend, and if the dividend could grow.

See our latest analysis for Tianjin Ringpu Bio-TechnologyLtd

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Tianjin Ringpu Bio-TechnologyLtd paid out a comfortable 40% of its profit last year. 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. It paid out 84% of its free cash flow as dividends, which is within usual limits but will limit the company's ability to lift the dividend if there's no growth.

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 the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see Tianjin Ringpu Bio-TechnologyLtd has grown its earnings rapidly, up 28% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Tianjin Ringpu Bio-TechnologyLtd has delivered 15% dividend growth per year on average over the past 10 years. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Should investors buy Tianjin Ringpu Bio-TechnologyLtd for the upcoming dividend? Earnings per share have grown at a nice rate in recent times and over the last year, Tianjin Ringpu Bio-TechnologyLtd paid out less than half its earnings and a bit over half its free cash flow. It's a promising combination that should mark this company worthy of closer attention.

In light of that, while Tianjin Ringpu Bio-TechnologyLtd has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 2 warning signs for Tianjin Ringpu Bio-TechnologyLtd and you should be aware of them before buying any shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full 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.