C&D Property Management Group Co. Limited’s (HKG:2156) dividend will be increasing from last year’s payment of the same period to CN¥0.26 on 7th of June. Despite this raise, the dividend yield of 5.0% is only a modest boost to shareholder returns.
View our latest analysis for C&D Property Management Group
C&D Property Management Group’s Dividend Is Well Covered By Earnings
Even a low dividend yield can be attractive if it is sustained for years on end. Based on the last payment, C&D Property Management Group was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.
Looking forward, earnings per share is forecast to rise by 9.9% over the next year. If the dividend continues on this path, the payout ratio could be 71% by next year, which we think can be pretty sustainable going forward.
C&D Property Management Group Doesn’t Have A Long Payment History
Looking back, the dividend has been stable, but the company hasn’t been paying a dividend for very long so we can’t be confident that the dividend will remain stable through all economic environments. Since 2022, the annual payment back then was CN¥0.0486, compared to the most recent full-year payment of CN¥0.147. This works out to be a compound annual growth rate (CAGR) of approximately 74% a year over that time. The dividend has been growing rapidly, however with such a short payment history we can’t know for sure if payment can continue to grow over the long term, so caution may be warranted.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company’s stock based on its dividend history. It’s encouraging to see that C&D Property Management Group has been growing its earnings per share at 54% a year over the past three years. The company’s earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that C&D Property Management Group could prove to be a strong dividend payer.
C&D Property Management Group Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we’ve picked out 2 warning signs for C&D Property Management Group that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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