Stock Analysis

Beijing Urban Construction Design & Development Group (HKG:1599) Will Pay A Larger Dividend Than Last Year At HK$0.20

SEHK:1599
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Beijing Urban Construction Design & Development Group Co., Limited's (HKG:1599) dividend will be increasing to HK$0.20 on 26th of August. This makes the dividend yield 9.7%, which is above the industry average.

See our latest analysis for Beijing Urban Construction Design & Development Group

Beijing Urban Construction Design & Development Group's Earnings Easily Cover the Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, Beijing Urban Construction Design & Development Group 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 6.5%. If the dividend continues on this path, the payout ratio could be 31% by next year, which we think can be pretty sustainable going forward.

historic-dividend
SEHK:1599 Historic Dividend May 30th 2022

Beijing Urban Construction Design & Development Group Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 7 years of history we want to see a few more years of history before making any solid conclusions. Since 2015, the first annual payment was CN¥0.074, compared to the most recent full-year payment of CN¥0.17. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Beijing Urban Construction Design & Development Group has seen EPS rising for the last five years, at 11% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like Beijing Urban Construction Design & Development Group's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. Just as an example, we've come across 2 warning signs for Beijing Urban Construction Design & Development Group you should be aware of, and 1 of them is significant. Is Beijing Urban Construction Design & Development Group 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.