Regina Miracle International (Holdings) (HKG:2199) Is Reducing Its Dividend To HK$0.018

Regina Miracle International (Holdings) Limited (HKG:2199) is reducing its dividend from last year's comparable payment to HK$0.018 on the 4th of October. This means the annual payment is 4.0% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Regina Miracle International (Holdings)

Regina Miracle International (Holdings)'s Payment Has Solid Earnings Coverage

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, Regina Miracle International (Holdings)'s earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 74.1%. If the dividend continues on this path, the payout ratio could be 18% by next year, which we think can be pretty sustainable going forward.

Regina Miracle International (Holdings)'s Dividend Has Lacked Consistency

Regina Miracle International (Holdings) has been paying dividends for a while, but the track record isn't stellar. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. Since 2016, the dividend has gone from HK$0.056 total annually to HK$0.103. This works out to be a compound annual growth rate (CAGR) of approximately 9.1% a year over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

We Could See Regina Miracle International (Holdings)'s Dividend Growing

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Regina Miracle International (Holdings) has seen EPS rising for the last five years, at 9.8% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like Regina Miracle International (Holdings)'s Dividend

It is generally not great to see the dividend being cut, but we don't think this should happen much if at all in the future given that Regina Miracle International (Holdings) has the makings of a solid income stock moving forward. By reducing the dividend, pressure will be taken off the balance sheet, which could help the dividend to be consistent in the future. All in all, this checks a lot of the boxes we look for when choosing an 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. Case in point: We've spotted 2 warning signs for Regina Miracle International (Holdings) (of which 1 is potentially serious!) you should know about. Is Regina Miracle International (Holdings) 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.