Jinmao Property Services Co., Limited (HKG:816) has announced that it will pay a dividend of CN¥0.17 per share on the 26th of August. The dividend yield will be 8.0% based on this payment which is still above the industry average.
Check out our latest analysis for Jinmao Property Services
Jinmao Property Services’ Payment Has Solid Earnings Coverage
We like to see robust dividend yields, but that doesn’t matter if the payment isn’t sustainable. Based on the last payment, Jinmao Property Services was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.
Over the next year, EPS is forecast to expand by 42.1%. If the dividend continues on this path, the payout ratio could be 32% by next year, which we think can be pretty sustainable going forward.
Jinmao Property Services Doesn’t Have A Long Payment History
Without a track record of dividend payments, we can’t make a judgement on how stable it has been. This doesn’t mean that the company can’t pay a good dividend, but just that we want to wait until it can prove itself.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Jinmao Property Services has impressed us by growing EPS at 57% per year over the past three years. Jinmao Property Services is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.
We Really Like Jinmao Property Services’ Dividend
In summary, it is good to see that the dividend is staying consistent, and we don’t think there is any reason to suspect this might change over the medium term. 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.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we’ve picked out 1 warning sign for Jinmao Property Services that investors should take into consideration. Is Jinmao Property Services not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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Find out whether Jinmao Property Services is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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