Lingsen Precision Industries, Ltd. (TWSE:2369) Goes Ex-Dividend Soon

Lingsen Precision Industries, Ltd. (TWSE:2369) stock is about to trade ex-dividend in 3 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled 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. This means that investors who purchase Lingsen Precision Industries' shares on or after the 1st of August will not receive the dividend, which will be paid on the 28th of August.

The company's upcoming dividend is NT$0.30 a share, following on from the last 12 months, when the company distributed a total of NT$0.30 per share to shareholders. Looking at the last 12 months of distributions, Lingsen Precision Industries has a trailing yield of approximately 1.4% on its current stock price of NT$20.95. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Lingsen Precision Industries

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Lingsen Precision Industries's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. Fortunately, it paid out only 27% of its free cash flow in the past year.

Click here to see how much of its profit Lingsen Precision Industries paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. Lingsen Precision Industries reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Lingsen Precision Industries's dividend payments per share have declined at 8.3% per year on average over the past 10 years, which is uninspiring.

We update our analysis on Lingsen Precision Industries every 24 hours, so you can always get the latest insights on its financial health, here.

Final Takeaway

Is Lingsen Precision Industries worth buying for its dividend? It's hard to get used to Lingsen Precision Industries paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. All things considered, we are not particularly enthused about Lingsen Precision Industries from a dividend perspective.

Keen to explore more data on Lingsen Precision Industries's financial performance? Check out our visualisation of its historical revenue and earnings growth.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.

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