Public Financial Holdings Limited (HKG:626) stock is about to trade ex-dividend in 4 days time. Investors can purchase shares before the 22nd of January in order to be eligible for this dividend, which will be paid on the 21st of February.
Public Financial Holdings’s next dividend payment will be HK$0.15 per share, on the back of last year when the company paid a total of HK$0.22 to shareholders. Based on the last year’s worth of payments, Public Financial Holdings stock has a trailing yield of around 6.8% on the current share price of HK$3.23. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.
See our latest analysis for Public Financial Holdings
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Public Financial Holdings paid out a comfortable 32% of its profit last year.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit Public Financial Holdings paid out over the last 12 months.
SEHK:626 Historical Dividend Yield, January 17th 2020More Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. 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 Public Financial Holdings, with earnings per share up 4.0% on average over the last five years.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. Public Financial Holdings’s dividend payments are broadly unchanged compared to where they were ten years ago.The Bottom Line
Should investors buy Public Financial Holdings for the upcoming dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Public Financial Holdings ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
Curious about whether Public Financial Holdings has been able to consistently generate growth? Here’s a chart of its historical revenue and earnings growth.
If you’re in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.Com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
Thankfully, it is easily apparent upon reviewing these metrics that their financial position has been quite healthy for the last three consecutive years. It is particularly reassuring to see their liquidity is quite strong with a current ratio of 1.43 and high interest coverage of 18.24, as this is an area of weakness for many of their competitors. Admittedly, their gearing ratio of 33.94% indicates a slight degree of financial pressure. However, after considering their other metrics such as net debt to operating cash flow and EBITDA, there are no reasons to be concerned.
Their good financial health will also help them remain in good favor with capital markets, which, during the last year, have turned increasingly sour on the broader shale oil and gas industry due to continuously disappointing financial performance. This situation could ideally provide them opportunities not available to competitors who are facing financial distress, such as acquiring assets at opportunistic prices.Conclusion
Whilst their financial position may not be perfectly clean, they are still a bright spot in an industry plagued by zombie companies who have minimal scope at best to ever meet their debt obligations, let alone reward their shareholders. This relatively good financial health will play an instrumental role ensuring that they can continue navigating any rough times and ultimately remain a going concern well into the future.
Notes: Notes: Unless specified otherwise, all figures in this article were taken from Cabot Oil & Gas’s SEC filings, all calculated figures were performed by the author.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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