Crystal International Group (HKG:2232) Has Affirmed Its Dividend Of $0.05

Crystal International Group Limited (HKG:2232) has announced that it will pay a dividend of $0.05 per share on the 20th of September. This makes the dividend yield 6.5%, which will augment investor returns quite nicely.

Check out our latest analysis for Crystal International Group

Crystal International Group Doesn't Earn Enough To Cover Its Payments

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Before making this announcement, Crystal International Group was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 36.0%. If the dividend continues on its recent course, the payout ratio in 12 months could be 171%, which is a bit high and could start applying pressure to the balance sheet.

Crystal International Group's Dividend Has Lacked Consistency

It's comforting to see that Crystal International Group has been paying a dividend for a number of years now, however it has been cut at least once in that time. This suggests that the dividend might not be the most reliable. Since 2018, the dividend has gone from $0.016 total annually to $0.0214. This means that it has been growing its distributions at 6.0% 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.

Crystal International Group May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Although it's important to note that Crystal International Group's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. While growth may be thin on the ground, Crystal International Group could always pay out a higher proportion of earnings to increase shareholder returns.

Our Thoughts On Crystal International Group's Dividend

Overall, a consistent dividend is a good thing, and we think that Crystal International Group has the ability to continue this into the future. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Crystal International Group that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.