Neusoft Education Technology (HKG:9616) Is Increasing Its Dividend To HK$0.14

The board of Neusoft Education Technology Co. Limited (HKG:9616) has announced that it will be increasing its dividend on the 24th of June to HK$0.14. Although the dividend is now higher, the yield is only 3.5%, which is below the industry average.

See our latest analysis for Neusoft Education Technology

Neusoft Education Technology's Payment Has Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. However, Neusoft Education Technology's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 30.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 25% by next year, which is in a pretty sustainable range.

Neusoft Education Technology Doesn't Have A Long Payment History

It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. 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.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Neusoft Education Technology has impressed us by growing EPS at 13% per year over the past five years. Neusoft Education Technology definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Neusoft Education Technology Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. As an example, we've identified 3 warning signs for Neusoft Education Technology that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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