ApicHope Pharmaceutical Co., Ltd (SZSE:300723) Pays A CN¥0.21 Dividend In Just Four Days

Readers hoping to buy ApicHope Pharmaceutical Co., Ltd (SZSE:300723) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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 ApicHope Pharmaceutical's shares before the 3rd of June in order to receive the dividend, which the company will pay on the 3rd of June.

The company's upcoming dividend is CN¥0.21 a share, following on from the last 12 months, when the company distributed a total of CN¥0.21 per share to shareholders. Based on the last year's worth of payments, ApicHope Pharmaceutical stock has a trailing yield of around 1.0% on the current share price of CN¥21.34. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether ApicHope Pharmaceutical has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for ApicHope Pharmaceutical

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. ApicHope Pharmaceutical paid out 53% of its earnings to investors last year, a normal payout level for most businesses. 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. Thankfully its dividend payments took up just 47% of the free cash flow it generated, which is a comfortable payout ratio.

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?

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. That's why it's not ideal to see ApicHope Pharmaceutical's earnings per share have been shrinking at 4.1% a year over the previous five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, six years ago, ApicHope Pharmaceutical has lifted its dividend by approximately 25% a year on average. Growing the dividend payout ratio while earnings are declining can deliver nice returns for a while, but it's always worth checking for when the company can't increase the payout ratio any more - because then the music stops.

The Bottom Line

Is ApicHope Pharmaceutical worth buying for its dividend? The payout ratios are within a reasonable range, implying the dividend may be sustainable. Declining earnings are a serious concern, however, and could pose a threat to the dividend in future. In summary, it's hard to get excited about ApicHope Pharmaceutical from a dividend perspective.

However if you're still interested in ApicHope Pharmaceutical as a potential investment, you should definitely consider some of the risks involved with ApicHope Pharmaceutical. For example - ApicHope Pharmaceutical has 4 warning signs we think 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.