Why You Might Be Interested In Beijing Haohan Data Technology Co.,Ltd (SHSE:688292) For Its Upcoming Dividend

Readers hoping to buy Beijing Haohan Data Technology Co.,Ltd (SHSE:688292) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled 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 Beijing Haohan Data TechnologyLtd's shares before the 18th of June to receive the dividend, which will be paid on the 18th of June.

The company's next dividend payment will be CN¥0.12 per share, and in the last 12 months, the company paid a total of CN¥0.10 per share. Based on the last year's worth of payments, Beijing Haohan Data TechnologyLtd stock has a trailing yield of around 0.6% on the current share price of CN¥16.50. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Beijing Haohan Data TechnologyLtd

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Beijing Haohan Data TechnologyLtd has a low and conservative payout ratio of just 21% of its income after tax. A useful secondary check can be to evaluate whether Beijing Haohan Data TechnologyLtd generated enough free cash flow to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 9.9% of its cash flow last year.

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 how much of its profit Beijing Haohan Data TechnologyLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Beijing Haohan Data TechnologyLtd has grown its earnings rapidly, up 25% a year for the past five years. Beijing Haohan Data TechnologyLtd looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.

Unfortunately Beijing Haohan Data TechnologyLtd has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

To Sum It Up

Has Beijing Haohan Data TechnologyLtd got what it takes to maintain its dividend payments? We love that Beijing Haohan Data TechnologyLtd is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. Beijing Haohan Data TechnologyLtd looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

Keen to explore more data on Beijing Haohan Data TechnologyLtd's financial performance? Check out our visualisation of its historical revenue and earnings growth.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com