CITIC Telecom International Holdings (HKG:1883) Has Announced A Dividend Of HK$0.06

The board of CITIC Telecom International Holdings Limited (HKG:1883) has announced that it will pay a dividend on the 29th of September, with investors receiving HK$0.06 per share. This makes the dividend yield 8.0%, which will augment investor returns quite nicely.

View our latest analysis for CITIC Telecom International Holdings

CITIC Telecom International Holdings' Dividend Is Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, CITIC Telecom International Holdings' dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 10.2%. If the dividend continues on this path, the payout ratio could be 67% by next year, which we think can be pretty sustainable going forward.

CITIC Telecom International Holdings Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the dividend has gone from HK$0.096 total annually to HK$0.245. This works out to be a compound annual growth rate (CAGR) of approximately 9.8% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. CITIC Telecom International Holdings has impressed us by growing EPS at 7.0% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

CITIC Telecom International Holdings Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. See if management have their own wealth at stake, by checking insider shareholdings in CITIC Telecom International Holdings stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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