YTO International Express and Supply Chain Technology's (HKG:6123) Shareholders Will Receive A Smaller Dividend Than Last Year

YTO International Express and Supply Chain Technology Limited (HKG:6123) has announced that on 8th of July, it will be paying a dividend ofHK$0.023, which a reduction from last year's comparable dividend. This means that the dividend yield is 1.9%, which is a bit low when comparing to other companies in the industry.

View our latest analysis for YTO International Express and Supply Chain Technology

YTO International Express and Supply Chain Technology's Payment Has Solid Earnings Coverage

Even a low dividend yield can be attractive if it is sustained for years on end. Before making this announcement, YTO International Express and Supply Chain Technology 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.

If the trend of the last few years continues, EPS will grow by 0.9% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 9.0% by next year, which is in a pretty sustainable range.

YTO International Express and Supply Chain Technology's Dividend Has Lacked Consistency

Looking back, YTO International Express and Supply Chain Technology's dividend hasn't been particularly consistent. This suggests that the dividend might not be the most reliable. Since 2015, the annual payment back then was HK$0.016, compared to the most recent full-year payment of HK$0.023. This implies that the company grew its distributions at a yearly rate of about 4.1% over that duration. 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's Growth Prospects Are Limited

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. YTO International Express and Supply Chain Technology hasn't seen much change in its earnings per share over the last five years. While growth may be thin on the ground, YTO International Express and Supply Chain Technology could always pay out a higher proportion of earnings to increase shareholder returns.

Our Thoughts On YTO International Express and Supply Chain Technology's Dividend

Overall, while it's not great to see that the dividend has been cut, we think the company is now in a good position to make consistent payments going into the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 3 warning signs for YTO International Express and Supply Chain Technology that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.