MicroPort NeuroScientific (HKG:2172) Will Pay A Dividend Of CN¥0.11

The board of MicroPort NeuroScientific Corporation (HKG:2172) has announced that it will pay a dividend on the 22nd of August, with investors receiving CN¥0.11 per share. This means the annual payment will be 1.7% of the current stock price, which is lower than the industry average.

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MicroPort NeuroScientific's Future Dividend Projections Appear Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Prior to this announcement, MicroPort NeuroScientific's dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 21.1%. Assuming the dividend continues along recent trends, we think the payout ratio could be 36% by next year, which is in a pretty sustainable range.

Check out our latest analysis for MicroPort NeuroScientific

MicroPort NeuroScientific Is Still Building Its Track Record

The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. MicroPort NeuroScientific has impressed us by growing EPS at 32% per year over the past five years. MicroPort NeuroScientific is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

MicroPort NeuroScientific Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for MicroPort NeuroScientific that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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