Lintes Technology Co., Ltd. (TWSE:6715) Is About To Go Ex-Dividend, And It Pays A 2.1% Yield

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Lintes Technology Co., Ltd. (TWSE:6715) is about to go ex-dividend in just three days. Typically, the ex-dividend date is one business day 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. Accordingly, Lintes Technology investors that purchase the stock on or after the 7th of August will not receive the dividend, which will be paid on the 5th of September.

The company's next dividend payment will be NT$3.303018 per share. Last year, in total, the company distributed NT$3.50 to shareholders. Based on the last year's worth of payments, Lintes Technology has a trailing yield of 2.1% on the current stock price of NT$169.00. If you buy this business for its dividend, you should have an idea of whether Lintes Technology's dividend is reliable and sustainable. As a result, readers should always check whether Lintes Technology has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Lintes Technology

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Lintes Technology is paying out an acceptable 54% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out more than half (57%) of its free cash flow in the past year, which is within an average range for most companies.

It's positive to see that Lintes Technology's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Lintes Technology 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 earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Lintes Technology, with earnings per share up 4.1% on average over the last five years. Earnings growth has been slim and the company is paying out more than half of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last five years, Lintes Technology has lifted its dividend by approximately 48% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

The Bottom Line

Is Lintes Technology an attractive dividend stock, or better left on the shelf? Earnings per share growth has been unremarkable, and while the company is paying out a majority of its earnings and cash flow in the form of dividends, the dividend payments don't appear excessive. Overall, it's hard to get excited about Lintes Technology from a dividend perspective.

So if you want to do more digging on Lintes Technology, you'll find it worthwhile knowing the risks that this stock faces. Every company has risks, and we've spotted 2 warning signs for Lintes Technology you should know about.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.

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