Hangzhou Binjiang Real Estate GroupLtd (SZSE:002244) Is Paying Out Less In Dividends Than Last Year

Hangzhou Binjiang Real Estate Group Co.,Ltd's (SZSE:002244) dividend is being reduced from last year's payment covering the same period to CN¥0.09 on the 16th of August. This means that the annual payment is 1.1% of the current stock price, which is lower than what the rest of the industry is paying.

See our latest analysis for Hangzhou Binjiang Real Estate GroupLtd

Hangzhou Binjiang Real Estate GroupLtd's Dividend Is Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Hangzhou Binjiang Real Estate GroupLtd's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 11.1%. If the dividend continues on this path, the payout ratio could be 12% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2014, the dividend has gone from CN¥0.055 total annually to CN¥0.09. This means that it has been growing its distributions at 5.0% 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. Hangzhou Binjiang Real Estate GroupLtd has impressed us by growing EPS at 14% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Hangzhou Binjiang Real Estate GroupLtd's Dividend

It is generally not great to see the dividend being cut, but we don't think this should happen much if at all in the future given that Hangzhou Binjiang Real Estate GroupLtd has the makings of a solid income stock moving forward. By reducing the dividend, pressure will be taken off the balance sheet, which could help the dividend to be consistent in the future. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 4 warning signs for Hangzhou Binjiang Real Estate GroupLtd that investors should take into consideration. 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.