Only Four Days Left To Cash In On Multifield International Holdings' (HKG:898) Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Multifield International Holdings Limited (HKG:898) is about to trade ex-dividend in the next 4 days. 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. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase Multifield International Holdings' shares before the 3rd of June to receive the dividend, which will be paid on the 25th of June.

The company's next dividend payment will be HK$0.02 per share. Last year, in total, the company distributed HK$0.04 to shareholders. Based on the last year's worth of payments, Multifield International Holdings stock has a trailing yield of around 5.0% on the current share price of HK$0.80. 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 Multifield International Holdings can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Multifield International Holdings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Multifield International Holdings has a low and conservative payout ratio of just 19% of its income after tax.

Click here to see how much of its profit Multifield International Holdings paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Multifield International Holdings's earnings per share have fallen at approximately 25% a year over the previous 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. Multifield International Holdings has seen its dividend decline 4.0% per annum on average over the past 10 years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

The Bottom Line

Should investors buy Multifield International Holdings for the upcoming dividend? Multifield International Holdings's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you want to look further into Multifield International Holdings, it's worth knowing the risks this business faces. Be aware that Multifield International Holdings is showing 5 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...

If you're in the market for strong dividend payers, we recommend checking 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.