CSSC (Hong Kong) Shipping Company Limited (HKG:3877) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

CSSC (Hong Kong) Shipping Company Limited (HKG:3877) is about to trade ex-dividend in the next three days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase CSSC (Hong Kong) Shipping's shares before the 29th of September in order to be eligible for the dividend, which will be paid on the 13th of November.

The company's next dividend payment will be HK$0.05 per share, and in the last 12 months, the company paid a total of HK$0.13 per share. Calculating the last year's worth of payments shows that CSSC (Hong Kong) Shipping has a trailing yield of 7.0% on the current share price of HK$1.91. If you buy this business for its dividend, you should have an idea of whether CSSC (Hong Kong) Shipping's dividend is reliable and sustainable. As a result, readers should always check whether CSSC (Hong Kong) Shipping has been able to grow its dividends, or if the dividend might be cut.

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Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. CSSC (Hong Kong) Shipping paid out more than half (50%) of its earnings last year, which is a regular payout ratio for most companies.

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.

See our latest analysis for CSSC (Hong Kong) Shipping

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

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. For this reason, we're glad to see CSSC (Hong Kong) Shipping's earnings per share have risen 13% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. CSSC (Hong Kong) Shipping has delivered an average of 14% per year annual increase in its dividend, based on the past six years of dividend payments. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

Is CSSC (Hong Kong) Shipping worth buying for its dividend? Earnings per share are growing at an attractive rate, and CSSC (Hong Kong) Shipping is paying out a bit over half its profits. Overall, CSSC (Hong Kong) Shipping looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we've discovered 1 warning sign for CSSC (Hong Kong) Shipping that you should be aware of before investing in their shares.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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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.