Range Intelligent Computing Technology Group's (SZSE:300442) Dividend Will Be Increased To CN¥0.3995

Range Intelligent Computing Technology Group Company Limited's (SZSE:300442) periodic dividend will be increasing on the 10th of October to CN¥0.3995, with investors receiving 2.4% more than last year's CN¥0.39. This takes the dividend yield to 1.9%, which shareholders will be pleased with.

View our latest analysis for Range Intelligent Computing Technology Group

Range Intelligent Computing Technology Group's Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. Based on the last payment, Range Intelligent Computing Technology Group's earnings were much higher than the dividend, but it wasn't converting those earnings into cash flow. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.

Looking forward, earnings per share is forecast to rise by 104.6% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 22%, which is in the range that makes us comfortable with the sustainability of the dividend.

Range Intelligent Computing Technology Group's Dividend Has Lacked Consistency

Looking back, the dividend has been unstable but with a relatively short history, we think it may be a bit early to draw conclusions about long term dividend sustainability. Since 2022, the dividend has gone from CN¥1.11 total annually to CN¥0.517. This works out to a decline of approximately 53% over that time. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, and a poor history of shrinking dividends, it's even more important to see if EPS is growing. Range Intelligent Computing Technology Group has seen EPS rising for the last three years, at 65% per annum. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Range Intelligent Computing Technology Group could prove to be a strong dividend payer.

Our Thoughts On Range Intelligent Computing Technology Group's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. We would probably look elsewhere for an income investment.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Range Intelligent Computing Technology Group has 3 warning signs (and 2 which make us uncomfortable) we think you should know about. Is Range Intelligent Computing Technology Group not quite the opportunity you were looking for? Why not check out 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.