Stock Analysis

Do These 3 Checks Before Buying Get Nice Financial Group Limited (HKG:1469) For Its Upcoming Dividend

SEHK:1469
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It looks like Get Nice Financial Group Limited (HKG:1469) is about to go ex-dividend in the next three days. If you purchase the stock on or after the 17th of December, you won't be eligible to receive this dividend, when it is paid on the 30th of December.

Get Nice Financial Group's next dividend payment will be HK$0.03 per share, and in the last 12 months, the company paid a total of HK$0.05 per share. Looking at the last 12 months of distributions, Get Nice Financial Group has a trailing yield of approximately 7.2% on its current stock price of HK$0.69. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Get Nice Financial Group has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Get Nice Financial Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. It paid out 83% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. We'd be concerned if earnings began to decline.

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.

Click here to see how much of its profit Get Nice Financial Group paid out over the last 12 months.

historic-dividend
SEHK:1469 Historic Dividend December 13th 2020

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Get Nice Financial Group's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 68% a year over the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Get Nice Financial Group has delivered 5.7% dividend growth per year on average over the past four years. The only way to pay higher dividends when earnings are shrinking is either to pay out a larger percentage of profits, spend cash from the balance sheet, or borrow the money. Get Nice Financial Group is already paying out 83% of its profits, and with shrinking earnings we think it's unlikely that this dividend will grow quickly in the future.

Final Takeaway

Is Get Nice Financial Group an attractive dividend stock, or better left on the shelf? Earnings per share have been declining and the company is paying out more than half its profits to shareholders; not an enticing combination. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

Having said that, if you're looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with Get Nice Financial Group. To help with this, we've discovered 2 warning signs for Get Nice Financial Group (1 is potentially serious!) that you ought to be aware of before buying the shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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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