Oriental Press Group Limited (HKG:18) Stock Goes Ex-Dividend In Just Four Days

Oriental Press Group Limited (HKG:18) is about to trade ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 8th of December will not receive the dividend, which will be paid on the 22nd of December.

Oriental Press Group's next dividend payment will be HK$0.02 per share, and in the last 12 months, the company paid a total of HK$0.04 per share. Based on the last year's worth of payments, Oriental Press Group stock has a trailing yield of around 8.7% on the current share price of HK$0.46. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Oriental Press Group can afford its dividend, and if the dividend could grow.

View our latest analysis for Oriental Press Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Oriental Press Group is paying out an acceptable 60% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Fortunately, it paid out only 42% of its free cash flow in the past year.

It's positive to see that Oriental Press Group's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Oriental Press Group paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by Oriental Press Group's 8.1% per annum decline in earnings in the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Oriental Press Group has seen its dividend decline 11% per annum on average over the past nine years, which is not great to see. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.

To Sum It Up

Is Oriental Press Group an attractive dividend stock, or better left on the shelf? We're not enthused by the declining earnings per share, although at least the company's payout ratio is within a reasonable range, meaning it may not be at imminent risk of a dividend cut. All things considered, we are not particularly enthused about Oriental Press Group from a dividend perspective.

With that being said, if dividends aren't your biggest concern with Oriental Press Group, you should know about the other risks facing this business. For instance, we've identified 4 warning signs for Oriental Press Group (1 can't be ignored) you should be aware of.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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