ManpowerGroup Greater China (HKG:2180) Will Pay A Larger Dividend Than Last Year At CN¥0.31

ManpowerGroup Greater China Limited (HKG:2180) will increase its dividend from last year's comparable payment on the 17th of July to CN¥0.31. This makes the dividend yield 6.2%, which is above the industry average.

View our latest analysis for ManpowerGroup Greater China

ManpowerGroup Greater China's Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. ManpowerGroup Greater China was earning enough to cover the previous dividend, but it was paying out quite a large proportion of its free cash flows. By paying out so much of its cash flows, this could indicate that the company has limited opportunities for investment and growth.

Looking forward, EPS could fall by 0.8% if the company can't turn things around from the last few years. If the dividend continues along recent trends, we estimate the payout ratio could be 64%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

ManpowerGroup Greater China's Dividend Has Lacked Consistency

Looking back, the dividend has been unstable but with a relatively short history, we think it may be a bit early to draw conclusions about long term dividend sustainability. The annual payment during the last 4 years was CN¥0.224 in 2020, and the most recent fiscal year payment was CN¥0.28. This implies that the company grew its distributions at a yearly rate of about 5.8% over that duration. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

ManpowerGroup Greater China May Find It Hard To Grow The Dividend

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. ManpowerGroup Greater China hasn't seen much change in its earnings per share over the last five years.

Our Thoughts On ManpowerGroup Greater China's Dividend

Overall, we always like to see the dividend being raised, but we don't think ManpowerGroup Greater China will make a great income stock. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments ManpowerGroup Greater China has been making. Overall, we don't think this company has the makings of a good income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for ManpowerGroup Greater China that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield 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.