SiS Mobile Holdings' (HKG:1362) Shareholders Will Receive A Smaller Dividend Than Last Year

SiS Mobile Holdings Limited (HKG:1362) has announced that on 12th of July, it will be paying a dividend ofHK$0.015, which a reduction from last year's comparable dividend. The dividend yield will be in the average range for the industry at 4.2%.

Check out our latest analysis for SiS Mobile Holdings

SiS Mobile Holdings' Payment Has Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. The last dividend was quite easily covered by SiS Mobile Holdings' earnings. This means that a large portion of its earnings are being retained to grow the business.

If the trend of the last few years continues, EPS will grow by 147.6% over the next 12 months. If the dividend continues on this path, the payout ratio could be 19% by next year, which we think can be pretty sustainable going forward.

SiS Mobile Holdings Doesn't Have A Long Payment History

It's not possible for us to make a backward looking judgement just based on a short payment history. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. We are encouraged to see that SiS Mobile Holdings has grown earnings per share at 148% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that SiS Mobile Holdings could prove to be a strong dividend payer.

We Really Like SiS Mobile Holdings' Dividend

It is generally not great to see the dividend being cut, but we don't think this should happen much if at all in the future given that SiS Mobile Holdings has the makings of a solid income stock moving forward. Reducing the amount it is paying as a dividend can protect the company's balance sheet, keeping the dividend sustainable for longer. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 3 warning signs for SiS Mobile Holdings that you should be aware of before investing. Is SiS Mobile Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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