Beauty Farm Medical and Health Industry's (HKG:2373) Shareholders Will Receive A Bigger Dividend Than Last Year

Beauty Farm Medical and Health Industry Inc.'s (HKG:2373) dividend will be increasing from last year's payment of the same period to CN¥0.47 on 25th of September. Although the dividend is now higher, the yield is only 2.9%, which is below the industry average.

See our latest analysis for Beauty Farm Medical and Health Industry

Beauty Farm Medical and Health Industry's Payment Has Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. The last dividend was quite easily covered by Beauty Farm Medical and Health Industry's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS is forecast to expand by 84.4%. If the dividend continues on this path, the payout ratio could be 28% by next year, which we think can be pretty sustainable going forward.

Beauty Farm Medical and Health Industry Doesn't Have A Long Payment History

The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

Beauty Farm Medical and Health Industry Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Beauty Farm Medical and Health Industry has seen EPS rising for the last five years, at 5.4% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

Our Thoughts On Beauty Farm Medical and Health Industry'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 payment isn't stellar, but it could make a decent addition to a dividend portfolio.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for Beauty Farm Medical and Health Industry for free with public analyst estimates for the company. Is Beauty Farm Medical and Health Industry 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.

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