Tianjin Development Holdings (HKG:882) Will Pay A Dividend Of HK$0.0345

Tianjin Development Holdings Limited (HKG:882) will pay a dividend of HK$0.0345 on the 30th of October. This makes the dividend yield 5.7%, which will augment investor returns quite nicely.

View our latest analysis for Tianjin Development Holdings

Tianjin Development Holdings' Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Tianjin Development Holdings' dividend was only 21% of earnings, however it was paying out 215% of free cash flows. While the business may be attempting to set a balanced dividend policy, a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.

If the trend of the last few years continues, EPS will grow by 6.4% 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.

Tianjin Development Holdings Is Still Building Its Track Record

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2014, the dividend has gone from HK$0.0663 total annually to HK$0.0895. This implies that the company grew its distributions at a yearly rate of about 3.4% over that duration. Tianjin Development Holdings hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

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. Tianjin Development Holdings has seen EPS rising for the last five years, at 6.4% per annum. Tianjin Development Holdings definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

In Summary

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Tianjin Development Holdings' payments, as there could be some issues with sustaining them into the future. While Tianjin Development Holdings is earning enough to cover the payments, the cash flows are lacking. We don't think Tianjin Development Holdings is a great stock to add to your portfolio if income is your focus.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Tianjin Development Holdings that investors should take into consideration. 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.