Beijing CTJ Information Technology (SZSE:301153) Has Announced A Dividend Of CN¥1.00

Beijing CTJ Information Technology Co., Ltd. (SZSE:301153) will pay a dividend of CN¥1.00 on the 9th of May. Based on this payment, the dividend yield on the company's stock will be 1.7%, which is an attractive boost to shareholder returns.

View our latest analysis for Beijing CTJ Information Technology

Beijing CTJ Information Technology's Payment Has Solid Earnings Coverage

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last dividend, Beijing CTJ Information Technology is earning enough to cover the payment, but then it makes up 1,085% of cash flows. This signals that the company is more focused on returning cash flow to shareholders, but it could mean that the dividend is exposed to cuts in the future.

Looking forward, earnings per share is forecast to rise by 96.2% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 36%, which is in the range that makes us comfortable with the sustainability of the dividend.

Beijing CTJ Information Technology's Dividend Has Lacked Consistency

The track record isn't the longest, but we are already seeing a bit of instability in the payments. The annual payment during the last 2 years was CN¥1.11 in 2022, and the most recent fiscal year payment was CN¥1.00. The dividend has shrunk at around 5.1% a year during that period. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend Looks Likely To Grow

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. It's encouraging to see that Beijing CTJ Information Technology has been growing its earnings per share at 24% a year over the past five years. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.

Our Thoughts On Beijing CTJ Information Technology's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Beijing CTJ Information Technology's payments, as there could be some issues with sustaining them into the future. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We would be a touch cautious of relying on this stock primarily for the dividend income.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Beijing CTJ Information Technology that investors should take into consideration. Is Beijing CTJ Information Technology not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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