Kangji Medical Holdings' (HKG:9997) Shareholders Will Receive A Bigger Dividend Than Last Year

Kangji Medical Holdings Limited's (HKG:9997) dividend will be increasing to HK$0.17 on 28th of June. Based on the announced payment, the dividend yield for the company will be 2.5%, which is fairly typical for the industry.

View our latest analysis for Kangji Medical Holdings

Kangji Medical Holdings' Earnings Easily Cover the Distributions

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Kangji Medical Holdings was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 34.8%. If the dividend continues on this path, the payout ratio could be 35% by next year, which we think can be pretty sustainable going forward.

Kangji Medical Holdings Is Still Building Its Track Record

Without a track record of dividend payments, we can't make a judgement on how stable it 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

Investors could be attracted to the stock based on the quality of its payment history. Kangji Medical Holdings will be very happy to have seen its EPS grow by 42% in just the last 12 months. We're glad to see EPS up on last year, but we're conscious that growth rates typically slow as companies increase in size. 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. However, we would never make any decisions based on only a single year of data, especially when assessing long term dividend potential.

We Really Like Kangji Medical Holdings' Dividend

Overall, a dividend increase is always good, and we think that Kangji Medical Holdings is a strong income stock thanks to its track record and growing earnings. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 2 warning signs for Kangji Medical Holdings (1 is concerning!) that you should be aware of before investing. Is Kangji Medical Holdings not quite the opportunity you were looking for? Why not check out 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.