Grandblue Environment's (SHSE:600323) Shareholders Will Receive A Bigger Dividend Than Last Year

Grandblue Environment Co., Ltd. (SHSE:600323) has announced that it will be increasing its dividend from last year's comparable payment on the 24th of July to CN¥0.48. Despite this raise, the dividend yield of 2.2% is only a modest boost to shareholder returns.

See our latest analysis for Grandblue Environment

Grandblue Environment's Dividend Is Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Before making this announcement, Grandblue Environment was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 29.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 22% by next year, which is in a pretty sustainable range.

Grandblue Environment Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from CN¥0.10 total annually to CN¥0.48. This works out to be a compound annual growth rate (CAGR) of approximately 17% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Grandblue Environment has seen EPS rising for the last five years, at 13% per annum. Grandblue Environment definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Grandblue Environment's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Grandblue Environment that you should be aware of before investing. Is Grandblue Environment 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.

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