Crystal International Group (HKG:2232) Will Pay A Larger Dividend Than Last Year At $0.05

Crystal International Group Limited (HKG:2232) has announced that it will be increasing its dividend from last year's comparable payment on the 15th of September to $0.05. This makes the dividend yield 5.3%, which is above the industry average.

Check out our latest analysis for Crystal International Group

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

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, Crystal International Group's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

The next 12 months is set to see EPS grow by 31.7%. However, if the dividend continues along recent trends, it could start putting pressure on the balance sheet with the payout ratio reaching 124% over the next year.

Crystal International Group's Dividend Has Lacked Consistency

The track record isn't the longest, but we are already seeing a bit of instability in the payments. Since 2018, the annual payment back then was $0.016, compared to the most recent full-year payment of $0.0176. This means that it has been growing its distributions at 2.4% per annum over that time. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

Crystal International Group May Find It Hard To Grow The Dividend

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Unfortunately, Crystal International Group's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. If Crystal International Group is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

Our Thoughts On Crystal International Group's Dividend

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Crystal International Group that you should be aware of before investing. Is Crystal International Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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