Green Future Food Hydrocolloid Marine Science (HKG:1084) Has Re-Affirmed Its Dividend Of HK$0.025

The board of Green Future Food Hydrocolloid Marine Science Company Limited (HKG:1084) has announced that it will pay a dividend on the 1st of January, with investors receiving HK$0.025 per share. This payment means the dividend yield will be 2.7%, which is below the average for the industry.

See our latest analysis for Green Future Food Hydrocolloid Marine Science

Green Future Food Hydrocolloid Marine Science'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. Before making this announcement, Green Future Food Hydrocolloid Marine Science was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 16.2% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 27% by next year, which is in a pretty sustainable range.

Green Future Food Hydrocolloid Marine Science's Dividend Has Lacked Consistency

Looking back, the dividend has been unstable but with a relatively short history, we think it may be a bit early to draw conclusions about long term dividend sustainability. The first annual payment during the last 2 years was HK$0.05 in 2020, and the most recent fiscal year payment was HK$0.03. Dividend payments have fallen sharply, down 40% over that time. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend Looks Likely To Grow

Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. It's encouraging to see Green Future Food Hydrocolloid Marine Science has been growing its earnings per share at 16% a year over the past five years. Green Future Food Hydrocolloid Marine Science definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Green Future Food Hydrocolloid Marine Science Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Green Future Food Hydrocolloid Marine Science might even raise payments in the future. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 2 warning signs for Green Future Food Hydrocolloid Marine Science (1 is concerning!) that you should be aware of before investing. Is Green Future Food Hydrocolloid Marine Science 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.