China Boqi Environmental (Holding) (HKG:2377) Has Re-Affirmed Its Dividend Of HK$0.074

The board of China Boqi Environmental (Holding) Co., Ltd. (HKG:2377) has announced that it will pay a dividend of HK$0.074 per share on the 14th of July. This means that the annual payment will be 5.7% of the current stock price, which is in line with the average for the industry.

See our latest analysis for China Boqi Environmental (Holding)

China Boqi Environmental (Holding)'s Earnings Easily Cover the Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable. Before making this announcement, China Boqi Environmental (Holding) was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 6.4% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 20% by next year, which is in a pretty sustainable range.

China Boqi Environmental (Holding)'s Dividend Has Lacked Consistency

Even in its short history, we have seen the dividend cut. The first annual payment during the last 3 years was CN¥0.079 in 2019, and the most recent fiscal year payment was CN¥0.06. This works out to be a decline of approximately 8.6% per year over that time. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.

We Could See China Boqi Environmental (Holding)'s Dividend Growing

Dividends have been going in the wrong direction, so we definitely want to see a different trend in the earnings per share. It's encouraging to see China Boqi Environmental (Holding) has been growing its earnings per share at 6.4% a year over the past five years. China Boqi Environmental (Holding) definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On China Boqi Environmental (Holding)'s Dividend

Overall, we think China Boqi Environmental (Holding) is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 3 warning signs for China Boqi Environmental (Holding) that you should be aware of before investing. Is China Boqi Environmental (Holding) 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.