Regular readers will know that we love our dividends at Simply Wall St, which is why it’s exciting to see Tian An China Investments Company Limited (HKG:28) is about to trade ex-dividend in the next 2 days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company’s books as a shareholder in order to receive the 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. In other words, investors can purchase Tian An China Investments’ shares before the 27th of April in order to be eligible for the dividend, which will be paid on the 15th of May.
The company’s next dividend payment will be HK$0.20 per share, and in the last 12 months, the company paid a total of HK$0.20 per share. Looking at the last 12 months of distributions, Tian An China Investments has a trailing yield of approximately 4.4% on its current stock price of HK$4.53. We love seeing companies pay a dividend, but it’s also important to be sure that laying the golden eggs isn’t going to kill our golden goose! So we need to investigate whether Tian An China Investments can afford its dividend, and if the dividend could grow.
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. Tian An China Investments has a low and conservative payout ratio of just 17% of its income after tax.
Check out our latest analysis for Tian An China Investments
Click here to see how much of its profit Tian An China Investments 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. It’s encouraging to see Tian An China Investments has grown its earnings rapidly, up 24% a year for the past five years.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. Tian An China Investments has delivered an average of 2.9% per year annual increase in its dividend, based on the past 10 years of dividend payments. It’s good to see both earnings and the dividend have improved – although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
The Bottom Line
Is Tian An China Investments an attractive dividend stock, or better left on the shelf? When companies are growing rapidly and retaining a majority of the profits within the business, it’s usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. Perhaps even more importantly – this can sometimes signal management is focused on the long term future of the business. Overall, Tian An China Investments looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
While it’s tempting to invest in Tian An China Investments for the dividends alone, you should always be mindful of the risks involved. Case in point: We’ve spotted 1 warning sign for Tian An China Investments you should be aware of.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
Valuation is complex, but we’re here to simplify it.
Discover if Tian An China Investments might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
