Keck Seng Investments (Hong Kong) (HKG:184) Is Due To Pay A Dividend Of HK$0.07

Keck Seng Investments (Hong Kong) Limited's (HKG:184) investors are due to receive a payment of HK$0.07 per share on 26th of June. This means the annual payment is 5.0% of the current stock price, which is above the average for the industry.

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Keck Seng Investments (Hong Kong)'s Future Dividend Projections Appear Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, prior to this announcement, Keck Seng Investments (Hong Kong)'s dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS could expand by 115.4% if recent trends continue. If the dividend continues on this path, the payout ratio could be 6.9% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Keck Seng Investments (Hong Kong)

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was HK$0.15 in 2015, and the most recent fiscal year payment was HK$0.12. This works out to be a decline of approximately 2.2% per year over that time. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Keck Seng Investments (Hong Kong) has been growing its earnings per share at 115% a year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Keck Seng Investments (Hong Kong) Looks Like A Great Dividend Stock

Overall, we think that Keck Seng Investments (Hong Kong) 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 2 warning signs for Keck Seng Investments (Hong Kong) that you should be aware of before investing. Is Keck Seng Investments (Hong Kong) not quite the opportunity you were looking for? Why not check out 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.