There's A Lot To Like About Public Financial Holdings' (HKG:626) Upcoming HK$0.15 Dividend

By
Simply Wall St
Published
January 19, 2022
SEHK:626
Source: Shutterstock

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Public Financial Holdings Limited (HKG:626) is about to trade ex-dividend in the next 4 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. 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. Therefore, if you purchase Public Financial Holdings' shares on or after the 24th of January, you won't be eligible to receive the dividend, when it is paid on the 25th of February.

The company's next dividend payment will be HK$0.15 per share, on the back of last year when the company paid a total of HK$0.17 to shareholders. Based on the last year's worth of payments, Public Financial Holdings has a trailing yield of 7.3% on the current stock price of HK$2.73. If you buy this business for its dividend, you should have an idea of whether Public Financial Holdings's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Public Financial Holdings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Public Financial Holdings paid out a comfortable 37% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Public Financial Holdings paid out over the last 12 months.

historic-dividend
SEHK:626 Historic Dividend January 19th 2022

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 Public Financial Holdings, with earnings per share up 3.5% on average over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Public Financial Holdings's dividend payments are effectively flat on where they were 10 years ago.

The Bottom Line

From a dividend perspective, should investors buy or avoid Public Financial Holdings? 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. Overall, Public Financial Holdings looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Every company has risks, and we've spotted 3 warning signs for Public Financial Holdings (of which 1 is significant!) you should know about.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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