Dickson Concepts (International)'s (HKG:113) Dividend Will Be HK$0.08

Dickson Concepts (International) Limited (HKG:113) has announced that it will pay a dividend of HK$0.08 per share on the 21st of January. This means the annual payment is 7.9% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Dickson Concepts (International)

Dickson Concepts (International)'s Dividend Is Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, Dickson Concepts (International) was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS could expand by 40.7% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 26% by next year, which is in a pretty sustainable range.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from HK$0.33 in 2011 to the most recent annual payment of HK$0.35. Dividend payments have grown at less than 1% a year over this period. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. We are encouraged to see that Dickson Concepts (International) has grown earnings per share at 41% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

We Really Like Dickson Concepts (International)'s Dividend

Overall, we like to see the dividend staying consistent, and we think Dickson Concepts (International) might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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 picked out 2 warning signs for Dickson Concepts (International) that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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