Qingdao Port International Co., Ltd. (HKG:6198) Pays A CN¥0.1466 Dividend In Just Two Days

Readers hoping to buy Qingdao Port International Co., Ltd. (HKG:6198) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase Qingdao Port International's shares before the 31st of October in order to receive the dividend, which the company will pay on the 24th of December.

The company's upcoming dividend is CN¥0.1466 a share, following on from the last 12 months, when the company distributed a total of CN¥0.40 per share to shareholders. Looking at the last 12 months of distributions, Qingdao Port International has a trailing yield of approximately 6.0% on its current stock price of HK$7.36. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Qingdao Port International has been able to grow its dividends, or if the dividend might be cut.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see Qingdao Port International paying out a modest 41% of its earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Dividends consumed 63% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

View our latest analysis for Qingdao Port International

Click here to see how much of its profit Qingdao Port International paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Qingdao Port International earnings per share are up 7.3% per annum over the last five years. Decent historical earnings per share growth suggests Qingdao Port International has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. Therefore it's unlikely that the company will be able to reinvest heavily in its business, which could presage slower growth in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Qingdao Port International has lifted its dividend by approximately 21% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Is Qingdao Port International worth buying for its dividend? Earnings per share have been growing at a steady rate, and Qingdao Port International paid out less than half its profits and more than half its free cash flow as dividends over the last year. In summary, it's hard to get excited about Qingdao Port International from a dividend perspective.

So while Qingdao Port International looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 1 warning sign for Qingdao Port International that you should be aware of before investing in their shares.

If you're in the market for strong dividend payers, we recommend checking 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.