Do These 3 Checks Before Buying Suzhou Goldengreen Technologies Ltd. (SZSE:002808) For Its Upcoming Dividend

Suzhou Goldengreen Technologies Ltd. (SZSE:002808) stock is about to trade ex-dividend in 3 days. 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. This means that investors who purchase Suzhou Goldengreen Technologies' shares on or after the 14th of June will not receive the dividend, which will be paid on the 14th of June.

The company's upcoming dividend is CN¥0.02 a share, following on from the last 12 months, when the company distributed a total of CN¥0.02 per share to shareholders. Based on the last year's worth of payments, Suzhou Goldengreen Technologies has a trailing yield of 1.3% on the current stock price of CN¥1.55. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

View our latest analysis for Suzhou Goldengreen Technologies

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Suzhou Goldengreen Technologies lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable.

Click here to see how much of its profit Suzhou Goldengreen Technologies paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Suzhou Goldengreen Technologies reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Suzhou Goldengreen Technologies has seen its dividend decline 11% per annum on average over the past seven years, which is not great to see. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.

Get our latest analysis on Suzhou Goldengreen Technologies's balance sheet health here.

The Bottom Line

Is Suzhou Goldengreen Technologies worth buying for its dividend? These characteristics don't generally lead to outstanding dividend performance, and investors may not be happy with the results of owning this stock for its dividend.

So if you're still interested in Suzhou Goldengreen Technologies despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. To that end, you should learn about the 3 warning signs we've spotted with Suzhou Goldengreen Technologies (including 2 which are a bit unpleasant).

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.