Guanze Medical Information Industry (Holding) (HKG:2427) Will Pay A Dividend Of CN¥0.021

The board of Guanze Medical Information Industry (Holding) Co., Ltd. (HKG:2427) has announced that it will pay a dividend on the 20th of June, with investors receiving CN¥0.021 per share. The dividend yield is 2.4% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for Guanze Medical Information Industry (Holding)

Guanze Medical Information Industry (Holding)'s Earnings Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. The last dividend was quite easily covered by Guanze Medical Information Industry (Holding)'s earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS could expand by 23.9% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 58% by next year, which is in a pretty sustainable range.

Guanze Medical Information Industry (Holding) Doesn't Have A Long Payment History

It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. 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

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. EPS has grown 24% over the last 12 months. This is a good sign, and could set the company up to be a solid dividend payer in the future if it continues. Guanze Medical Information Industry (Holding) is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future. We do note though, one year is too short a time to be drawing strong conclusions about a company's future prospects.

We Really Like Guanze Medical Information Industry (Holding)'s Dividend

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. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Guanze Medical Information Industry (Holding) that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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