Regina Miracle International (Holdings)'s (HKG:2199) Dividend Is Being Reduced 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. However, the dividend yield of 3.8% is still a decent boost to shareholder returns.

See our latest analysis for Regina Miracle International (Holdings)

Regina Miracle International (Holdings)'s Earnings Easily Cover The Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. 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.

The next year is set to see EPS grow 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. This suggests that the dividend might not be the most reliable. The annual payment during the last 7 years was HK$0.056 in 2016, and the most recent fiscal year payment was HK$0.103. This means that it has been growing its distributions at 9.1% per annum 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

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Regina Miracle International (Holdings) has seen EPS rising for the last five years, at 9.8% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Regina Miracle International (Holdings)'s prospects of growing its dividend payments in the future.

Regina Miracle International (Holdings) Looks Like A Great Dividend Stock

Overall, we think that Regina Miracle International (Holdings) could be a great option for a dividend investment, although we would have preferred if the dividend wasn't cut this year. By reducing the dividend, pressure will be taken off the balance sheet, which could help the dividend to be consistent in the future. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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 a bit unpleasant!) you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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