Tycoon Group Holdings (HKG:3390) Has Announced A Dividend Of HK$0.035

The board of Tycoon Group Holdings Limited (HKG:3390) has announced that it will pay a dividend of HK$0.035 per share on the 12th of July. Even though the dividend went up, the yield is still quite low at only 1.7%.

View our latest analysis for Tycoon Group Holdings

Tycoon Group Holdings' 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. However, Tycoon Group Holdings' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 132.4% over the next 12 months. If the dividend continues on this path, the payout ratio could be 9.5% by next year, which we think can be pretty sustainable going forward.

Tycoon Group Holdings 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

The company's investors will be pleased to have been receiving dividend income for some time. Tycoon Group Holdings has impressed us by growing EPS at 132% per year over the past three years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Tycoon Group Holdings Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Tycoon Group Holdings that investors need to be conscious of moving forward. Is Tycoon Group Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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