Four Days Left Until Guolian Minsheng Securities Co., Ltd. (HKG:1456) Trades Ex-Dividend

Guolian Minsheng Securities Co., Ltd. (HKG:1456) stock is about to trade ex-dividend in 4 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Guolian Minsheng Securities' shares before the 16th of June to receive the dividend, which will be paid on the 5th of August.

The company's next dividend payment will be CN¥0.056 per share, on the back of last year when the company paid a total of CN¥0.056 to shareholders. Looking at the last 12 months of distributions, Guolian Minsheng Securities has a trailing yield of approximately 1.6% on its current stock price of HK$3.81. If you buy this business for its dividend, you should have an idea of whether Guolian Minsheng Securities's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

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Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Guolian Minsheng Securities is paying out just 19% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Check out our latest analysis for Guolian Minsheng Securities

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Guolian Minsheng Securities's earnings per share have fallen at approximately 8.6% a year over the previous five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Guolian Minsheng Securities has seen its dividend decline 20% per annum on average over the past nine years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

Final Takeaway

Has Guolian Minsheng Securities got what it takes to maintain its dividend payments? Guolian Minsheng Securities's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.

So if you want to do more digging on Guolian Minsheng Securities, you'll find it worthwhile knowing the risks that this stock faces. For example - Guolian Minsheng Securities has 1 warning sign we think you should be aware of.

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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.