Regina Miracle International (Holdings)'s (HKG:2199) Dividend Will Be Reduced To HK$0.018

Regina Miracle International (Holdings) Limited (HKG:2199) has announced that on 4th of October, it will be paying a dividend ofHK$0.018, which a reduction from last year's comparable dividend. However, the dividend yield of 3.6% is still a decent boost to shareholder returns.

View our latest analysis for Regina Miracle International (Holdings)

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

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, prior to this announcement, Regina Miracle International (Holdings)'s dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 152.7%. If the dividend continues along recent trends, we estimate the payout ratio will be 13%, which is in the range that makes us comfortable with the sustainability of the dividend.

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

Looking back, Regina Miracle International (Holdings)'s dividend hasn't been particularly consistent. This suggests that the dividend might not be the most reliable. Since 2016, the annual payment back then was HK$0.056, compared to the most recent full-year payment of HK$0.103. This works out to be a compound annual growth rate (CAGR) of approximately 9.1% a year over that time. 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.

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. It's encouraging to see that Regina Miracle International (Holdings) has been growing its earnings per share at 9.8% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

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. Reducing the amount it is paying as a dividend can protect the company's balance sheet, keeping the dividend sustainable for longer. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 2 warning signs for Regina Miracle International (Holdings) (1 doesn't sit too well with us!) that you should be aware of before investing. 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.