Dickson Concepts (International)'s (HKG:113) Dividend Will Be HK$0.27

Dickson Concepts (International) Limited (HKG:113) has announced that it will pay a dividend of HK$0.27 per share on the 25th of August. This makes the dividend yield 7.8%, which will augment investor returns quite nicely.

See our latest analysis for Dickson Concepts (International)

Dickson Concepts (International)'s Payment Has Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Before making this announcement, Dickson Concepts (International) was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 10.4% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 52% by next year, which is in a pretty sustainable range.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2013, the annual payment back then was HK$0.33, compared to the most recent full-year payment of HK$0.35. Its dividends have grown at less than 1% per annum over this time frame. It's encouraging to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth anyway, which makes this less attractive as an income investment.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Dickson Concepts (International) has impressed us by growing EPS at 10% per year over the past five years. Dickson Concepts (International) definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Dickson Concepts (International) Looks Like A Great Dividend Stock

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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 2 warning signs for Dickson Concepts (International) (of which 1 shouldn't be ignored!) you should know about. If you are a dividend investor, you might also want to look at our curated 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.