There's A Lot To Like About PICC Property and Casualty's (HKG:2328) Upcoming CN¥0.489 Dividend

PICC Property and Casualty Company Limited (HKG:2328) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Therefore, if you purchase PICC Property and Casualty's shares on or after the 5th of July, you won't be eligible to receive the dividend, when it is paid on the 30th of August.

The company's upcoming dividend is CN¥0.489 a share, following on from the last 12 months, when the company distributed a total of CN¥0.49 per share to shareholders. Based on the last year's worth of payments, PICC Property and Casualty has a trailing yield of 5.4% on the current stock price of HK$9.70. If you buy this business for its dividend, you should have an idea of whether PICC Property and Casualty's dividend is reliable and sustainable. As a result, readers should always check whether PICC Property and Casualty has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for PICC Property and Casualty

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 PICC Property and Casualty paying out a modest 44% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see PICC Property and Casualty earnings per share are up 9.7% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. PICC Property and Casualty has delivered an average of 12% per year annual increase in its dividend, based on the past 10 years of dividend payments. 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 PICC Property and Casualty an attractive dividend stock, or better left on the shelf? PICC Property and Casualty has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. PICC Property and Casualty ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

On that note, you'll want to research what risks PICC Property and Casualty is facing. Case in point: We've spotted 1 warning sign for PICC Property and Casualty you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com