Tianjin Port Development Holdings (HKG:3382) Is Paying Out A Larger Dividend Than Last Year

Tianjin Port Development Holdings Limited's (HKG:3382) dividend will be increasing to HK$0.06 on 22nd of July. The announced payment will take the dividend yield to 9.2%, which is in line with the average for the industry.

View our latest analysis for Tianjin Port Development Holdings

Tianjin Port Development Holdings' Earnings Easily Cover the Distributions

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Before making this announcement, Tianjin Port Development Holdings was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 11.7% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 34%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The first annual payment during the last 10 years was HK$0.048 in 2012, and the most recent fiscal year payment was HK$0.06. This implies that the company grew its distributions at a yearly rate of about 2.2% over that duration. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.

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. Tianjin Port Development Holdings has impressed us by growing EPS at 12% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Tianjin Port Development Holdings' prospects of growing its dividend payments in the future.

Tianjin Port Development Holdings Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Tianjin Port Development Holdings is a strong income stock thanks to its track record and growing earnings. 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. 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 2 warning signs for Tianjin Port Development Holdings that you should be aware of before investing. Is Tianjin Port Development Holdings not quite the opportunity you were looking for? Why not check out 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.