Leeport (Holdings)'s (HKG:387) Dividend Will Be HK$0.03

The board of Leeport (Holdings) Limited (HKG:387) has announced that it will pay a dividend of HK$0.03 per share on the 15th of July. However, the dividend yield of 8.0% still remains in a typical range for the industry.

Leeport (Holdings)'s Future Dividend Projections Appear Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable. The last dividend was quite easily covered by Leeport (Holdings)'s earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS could expand by 62.4% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 40% by next year, which is in a pretty sustainable range.

See our latest analysis for Leeport (Holdings)

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2015, the annual payment back then was HK$0.015, compared to the most recent full-year payment of HK$0.06. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Leeport (Holdings) has impressed us by growing EPS at 62% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Leeport (Holdings) could prove to be a strong dividend payer.

We Really Like Leeport (Holdings)'s Dividend

In general, we don't like to see the dividend being cut, especially when the company has such high potential like Leeport (Holdings) does. The cut will allow the company to continue paying out the dividend without putting the balance sheet under pressure, which means that it could remain sustainable for longer. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 3 warning signs for Leeport (Holdings) that investors should know about before committing capital to this stock. 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.