Income Investors Should Know That Tingyi (Cayman Islands) Holding Corp. (HKG:322) Goes Ex-Dividend Soon

Tingyi (Cayman Islands) Holding Corp. (HKG:322) stock is about to trade ex-dividend in four days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase Tingyi (Cayman Islands) Holding's shares before the 12th of June in order to receive the dividend, which the company will pay on the 10th of July.

The company's upcoming dividend is CN¥0.5532 a share, following on from the last 12 months, when the company distributed a total of CN¥0.55 per share to shareholders. Looking at the last 12 months of distributions, Tingyi (Cayman Islands) Holding has a trailing yield of approximately 6.1% on its current stock price of HK$9.80. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Tingyi (Cayman Islands) Holding has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Tingyi (Cayman Islands) Holding

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Tingyi (Cayman Islands) Holding's payout ratio is modest, at just 50% of profit. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Dividends consumed 68% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Tingyi (Cayman Islands) Holding, with earnings per share up 4.8% on average over the last five years. Earnings growth has been slim and the company is paying out more than half of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Tingyi (Cayman Islands) Holding has delivered 9.5% dividend growth per year on average over the past 10 years. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Should investors buy Tingyi (Cayman Islands) Holding for the upcoming dividend? Earnings per share have been growing at a steady rate, and Tingyi (Cayman Islands) Holding paid out less than half its profits and more than half its free cash flow as dividends over the last year. To summarise, Tingyi (Cayman Islands) Holding looks okay on this analysis, although it doesn't appear a stand-out opportunity.

So while Tingyi (Cayman Islands) Holding looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Case in point: We've spotted 1 warning sign for Tingyi (Cayman Islands) Holding you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.