G-Resources Group (HKG:1051) Is Due To Pay A Dividend Of $0.12

G-Resources Group Limited (HKG:1051) has announced that it will pay a dividend of $0.12 per share on the 17th of July. The dividend yield is 1.3% based on this payment, which is a little bit low compared to the other companies in the industry.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that G-Resources Group's stock price has increased by 94% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

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Estimates Indicate G-Resources Group's Could Struggle to Maintain Dividend Payments In The Future

Even a low dividend yield can be attractive if it is sustained for years on end. Before making this announcement, G-Resources Group was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

EPS is set to grow by 1.8% over the next year if recent trends continue. However, if the dividend continues along recent trends, it could start putting pressure on the balance sheet with the payout ratio reaching 100% over the next year.

View our latest analysis for G-Resources Group

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of $0.0368 in 2015 to the most recent total annual payment of $0.0153. This works out to be a decline of approximately 8.4% per year over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

Dividend Growth May Be Hard To Achieve

Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. Although it's important to note that G-Resources Group's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. If G-Resources Group is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

Our Thoughts On G-Resources Group's Dividend

Overall, we think G-Resources Group is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for G-Resources Group that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.