B.Duck Semk Holdings International's (HKG:2250) Dividend Will Be Reduced To HK$0.005

B.Duck Semk Holdings International Limited (HKG:2250) is reducing its dividend to HK$0.005 on the 21st of Junewhich is 75% less than last year's comparable payment of HK$0.0201. The dividend yield will be in the average range for the industry at 1.7%.

View our latest analysis for B.Duck Semk Holdings International

B.Duck Semk Holdings International Might Find It Hard To Continue The Dividend

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. However, prior to this announcement, B.Duck Semk Holdings International's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS might fall by 2.3% based on recent performance. This means the company won't be turning a profit, which could place managers in the tough spot of having to choose between suspending the dividend or putting more pressure on the balance sheet.

B.Duck Semk Holdings International'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. Since 2022, the annual payment back then was HK$0.048, compared to the most recent full-year payment of HK$0.0201. This works out to a decline of approximately 58% over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend's Growth Prospects Are Limited

Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. It's not great to see that B.Duck Semk Holdings International's earnings per share has fallen at approximately 2.3% per year over the past five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.

Our Thoughts On B.Duck Semk Holdings International's Dividend

Overall, it's not great to see that the dividend has been cut, but this might be explained by the payments being a bit high previously. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. We don't think B.Duck Semk Holdings International is a great stock to add to your portfolio if income is your focus.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Now, if you want to look closer, it would be worth checking out our free research on B.Duck Semk Holdings International management tenure, salary, and performance. Is B.Duck Semk Holdings International not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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