Dah Sing Banking Group's (HKG:2356) Dividend Will Be HK$0.39

Dah Sing Banking Group Limited (HKG:2356) has announced that it will pay a dividend of HK$0.39 per share on the 18th of June. The dividend yield will be in the average range for the industry at 7.4%.

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Dah Sing Banking Group's Dividend Forecasted To Be Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Dah Sing Banking Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Dah Sing Banking Group's payout ratio of 45% is a good sign as this means that earnings decently cover dividends.

The next 3 years are set to see EPS grow by 30.4%. Analysts forecast the future payout ratio could be 47% over the same time horizon, which is a number we think the company can maintain.

See our latest analysis for Dah Sing Banking Group

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The annual payment during the last 10 years was HK$0.34 in 2015, and the most recent fiscal year payment was HK$0.66. This means that it has been growing its distributions at 6.9% per annum over that time. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.

Dividend Growth May Be Hard To Achieve

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Unfortunately, Dah Sing Banking Group's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year.

In Summary

Overall, it's not great to see that the dividend has been cut, but this might be explained by the payments being a bit high previously. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Dah Sing Banking Group has been making. We would probably look elsewhere for an income investment.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Dah Sing Banking Group that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.