Readers hoping to buy PICC Property and Casualty Company Limited (HKG:2328) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company’s books on the record date. In other words, investors can purchase PICC Property and Casualty’s shares before the 23rd of June in order to be eligible for the dividend, which will be paid on the 29th of July.
The company’s next dividend payment will be CN¥0.41 per share. Last year, in total, the company distributed CN¥0.46 to shareholders. Based on the last year’s worth of payments, PICC Property and Casualty has a trailing yield of 6.5% on the current stock price of HK$8.27. If you buy this business for its dividend, you should have an idea of whether PICC Property and Casualty’s dividend is reliable and sustainable. As a result, readers should always check whether PICC Property and Casualty has been able to grow its dividends, or if the dividend might be cut.
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. PICC Property and Casualty paid out a comfortable 46% 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.
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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it’s a relief to see PICC Property and Casualty earnings per share are up 4.4% per annum over the last five years.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, PICC Property and Casualty has lifted its dividend by approximately 12% a year on average. We’re glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
To Sum It Up
Has PICC Property and Casualty got what it takes to maintain its dividend payments? 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. PICC Property and Casualty 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.
On that note, you’ll want to research what risks PICC Property and Casualty is facing. Case in point: We’ve spotted 1 warning sign for PICC Property and Casualty 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.
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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.