Get Nice Financial Group's (HKG:1469) Dividend Will Be HK$0.03

The board of Get Nice Financial Group Limited (HKG:1469) has announced that it will pay a dividend on the 5th of September, with investors receiving HK$0.03 per share. Based on this payment, the dividend yield on the company's stock will be 8.8%, which is an attractive boost to shareholder returns.

View our latest analysis for Get Nice Financial Group

Get Nice Financial Group Is Paying Out More Than It Is Earning

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, Get Nice Financial Group's profits didn't cover the dividend, but the company was generating enough cash instead. Generally, we think cash is more important than accounting measures of profit, so with the cash flows easily covering the dividend, we don't think there is much reason to worry.

Earnings per share could rise by 2.8% over the next year if things go the same way as they have for the last few years. Assuming the dividend continues along recent trends, we think the payout ratio could reach 96%, which probably can't continue without starting to put some pressure on the balance sheet.

Get Nice Financial Group's Dividend Has Lacked Consistency

Get Nice Financial Group has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. Since 2016, the annual payment back then was HK$0.04, compared to the most recent full-year payment of HK$0.06. This implies that the company grew its distributions at a yearly rate of about 5.2% over that duration. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

Dividend Growth May Be Hard To Achieve

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Earnings has been rising at 2.8% per annum over the last five years, which admittedly is a bit slow. The earnings growth is anaemic, and the company is paying out 98% of its profit. This gives limited room for the company to raise the dividend in the future.

Our Thoughts On Get Nice Financial Group's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. We don't think Get Nice Financial Group is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 2 warning signs for Get Nice Financial Group that investors need to be conscious of moving forward. Is Get Nice Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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