Fujian Expressway Development Co.,Ltd (SHSE:600033) Looks Interesting, And It's About To Pay A Dividend

Fujian Expressway Development Co.,Ltd (SHSE:600033) stock is about to trade ex-dividend in two days. 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. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase Fujian Expressway DevelopmentLtd's shares before the 27th of June in order to be eligible for the dividend, which will be paid on the 27th of June.

The company's next dividend payment will be CN¥0.12 per share. Last year, in total, the company distributed CN¥0.12 to shareholders. Based on the last year's worth of payments, Fujian Expressway DevelopmentLtd stock has a trailing yield of around 3.5% on the current share price of CN¥3.40. If you buy this business for its dividend, you should have an idea of whether Fujian Expressway DevelopmentLtd's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Fujian Expressway DevelopmentLtd

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Fujian Expressway DevelopmentLtd's payout ratio is modest, at just 36% of profit.

Click here to see how much of its profit Fujian Expressway DevelopmentLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Fujian Expressway DevelopmentLtd, with earnings per share up 4.5% on average over the last five years. Earnings per share growth in recent times has not been a standout. However, companies that see their growth slow can often choose to pay out a greater percentage of earnings to shareholders, which could see the dividend continue to rise.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Fujian Expressway DevelopmentLtd has lifted its dividend by approximately 1.8% a year on average.

To Sum It Up

Has Fujian Expressway DevelopmentLtd got what it takes to maintain its dividend payments? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating Fujian Expressway DevelopmentLtd more closely.

So while Fujian Expressway DevelopmentLtd looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 1 warning sign for Fujian Expressway DevelopmentLtd that we recommend you consider before investing in the business.

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.

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