There's A Lot To Like About Ping An Insurance (Group) Company of China's (HKG:2318) Upcoming CN¥1.50 Dividend

Readers hoping to buy Ping An Insurance (Group) Company of China, Ltd. (HKG:2318) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Meaning, you will need to purchase Ping An Insurance (Group) Company of China's shares before the 1st of June to receive the dividend, which will be paid on the 20th of June.

The company's upcoming dividend is CN¥1.50 a share, following on from the last 12 months, when the company distributed a total of CN¥2.38 per share to shareholders. Based on the last year's worth of payments, Ping An Insurance (Group) Company of China has a trailing yield of 5.7% on the current stock price of HK$48.4. 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! So we need to investigate whether Ping An Insurance (Group) Company of China can afford its dividend, and if the dividend could grow.

See our latest analysis for Ping An Insurance (Group) Company of China

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see Ping An Insurance (Group) Company of China paying out a modest 44% of its earnings.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

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

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. 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 Ping An Insurance (Group) Company of China, with earnings per share up 8.5% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Ping An Insurance (Group) Company of China has delivered 24% 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.

To Sum It Up

Is Ping An Insurance (Group) Company of China worth buying for its dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating Ping An Insurance (Group) Company of China more closely.

So while Ping An Insurance (Group) Company of China looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 2 warning signs for Ping An Insurance (Group) Company of China that we recommend you consider before investing in the business.

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.