CIMC Enric Holdings (HKG:3899) Is Due To Pay A Dividend Of CN¥0.30

CIMC Enric Holdings Limited's (HKG:3899) investors are due to receive a payment of CN¥0.30 per share on 25th of July. This means the annual payment is 4.5% of the current stock price, which is above the average for the industry.

We've discovered 1 warning sign about CIMC Enric Holdings. View them for free.

CIMC Enric Holdings' Projected Earnings Seem Likely To Cover Future Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, CIMC Enric Holdings' dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS is forecast to expand by 64.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 37%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for CIMC Enric Holdings

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. Since 2015, the annual payment back then was CN¥0.155, compared to the most recent full-year payment of CN¥0.27. This implies that the company grew its distributions at a yearly rate of about 5.7% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

CIMC Enric Holdings May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Earnings per share has been crawling upwards at 3.1% per year. The company has been growing at a pretty soft 3.1% per annum, and is paying out quite a lot of its earnings to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.

Our Thoughts On CIMC Enric Holdings' Dividend

Overall, a consistent dividend is a good thing, and we think that CIMC Enric Holdings has the ability to continue this into the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for CIMC Enric Holdings that investors should know about before committing capital to this stock. Is CIMC Enric Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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