Winox Holdings Limited (HKG:6838) Stock Goes Ex-Dividend In Just Four Days

Winox Holdings Limited (HKG:6838) is about to trade ex-dividend in the next 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Winox Holdings' shares on or after the 29th of May, you won't be eligible to receive the dividend, when it is paid on the 28th of June.

The company's upcoming dividend is HK$0.02 a share, following on from the last 12 months, when the company distributed a total of HK$0.035 per share to shareholders. Based on the last year's worth of payments, Winox Holdings stock has a trailing yield of around 4.6% on the current share price of HK$0.76. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Winox Holdings has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Winox Holdings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Winox Holdings paid out a comfortable 33% of its profit last year. A useful secondary check can be to evaluate whether Winox Holdings generated enough free cash flow to afford its dividend. Luckily it paid out just 25% of its free cash flow last year.

It's positive to see that Winox Holdings's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Winox Holdings paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Winox Holdings's earnings per share have fallen at approximately 16% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Winox Holdings has seen its dividend decline 1.7% per annum on average over the past 10 years, which is not great to see.

Final Takeaway

Is Winox Holdings worth buying for its dividend? Winox Holdings has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. In summary, it's hard to get excited about Winox Holdings from a dividend perspective.

In light of that, while Winox Holdings has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 3 warning signs for Winox Holdings (1 can't be ignored!) that deserve your attention before investing in the shares.

If you're in the market for strong dividend payers, we recommend checking 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.