Anxian Yuan China Holdings Limited (HKG:922) Passed Our Checks, And It's About To Pay A HK$0.008 Dividend

It looks like Anxian Yuan China Holdings Limited (HKG:922) is about to go ex-dividend in the next 4 days. Ex-dividend means that investors that purchase the stock on or after the 22nd of December will not receive this dividend, which will be paid on the 13th of January.

The upcoming dividend for Anxian Yuan China Holdings is HK$0.008 per share. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Anxian Yuan China Holdings can afford its dividend, and if the dividend could grow.

See our latest analysis for Anxian Yuan China Holdings

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Anxian Yuan China Holdings has a low and conservative payout ratio of just 12% of its income after tax.

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

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Anxian Yuan China Holdings, with earnings per share up 3.0% on average over the last five years. Growth has been anaemic. Yet with more than 75% of its earnings being kept in the business, there is ample room to reinvest in growth or lift the payout ratio - either of which could increase the dividend.

We'd also point out that Anxian Yuan China Holdings issued a meaningful number of new shares in the past year. Trying to grow the dividend while issuing large amounts of new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill.

This is Anxian Yuan China Holdings's first year of paying a dividend, which is exciting for shareholders - but it does mean there's no dividend history to examine.

To Sum It Up

Has Anxian Yuan China Holdings got what it takes to maintain its dividend payments? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. In summary, Anxian Yuan China Holdings appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 4 warning signs for Anxian Yuan China Holdings that we strongly recommend you have a look at before investing in the company.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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