Dynagreen Environmental Protection Group Co., Ltd. (HKG:1330) Will Pay A CN¥0.11 Dividend In Two Days

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Dynagreen Environmental Protection Group Co., Ltd. (HKG:1330) is about to go ex-dividend in just two days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, Dynagreen Environmental Protection Group investors that purchase the stock on or after the 29th of October will not receive the dividend, which will be paid on the 11th of December.

The company's next dividend payment will be CN¥0.11 per share, on the back of last year when the company paid a total of CN¥0.32 to shareholders. Last year's total dividend payments show that Dynagreen Environmental Protection Group has a trailing yield of 6.1% on the current share price of HK$6.16. If you buy this business for its dividend, you should have an idea of whether Dynagreen Environmental Protection Group's dividend is reliable and sustainable. As a result, readers should always check whether Dynagreen Environmental Protection Group has been able to grow its dividends, or if the dividend might be cut.

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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. Dynagreen Environmental Protection Group is paying out an acceptable 64% of its profit, a common payout level among most companies. A useful secondary check can be to evaluate whether Dynagreen Environmental Protection Group generated enough free cash flow to afford its dividend. It distributed 43% of its free cash flow as dividends, a comfortable payout level for most companies.

It's positive to see that Dynagreen Environmental Protection Group's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Check out our latest analysis for Dynagreen Environmental Protection Group

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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 Dynagreen Environmental Protection Group earnings per share are up 3.5% per annum over the last five years. Earnings per share growth has been slim, and the company is already paying out a majority of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Dynagreen Environmental Protection Group has lifted its dividend by approximately 27% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Has Dynagreen Environmental Protection Group got what it takes to maintain its dividend payments? While earnings per share growth has been modest, Dynagreen Environmental Protection Group's dividend payouts are around an average level; without a sharp change in earnings we feel that the dividend is likely somewhat sustainable. Pleasingly the company paid out a conservatively low percentage of its free cash flow. Overall we're not hugely bearish on the stock, but there are likely better dividend investments out there.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Every company has risks, and we've spotted 2 warning signs for Dynagreen Environmental Protection Group (of which 1 can't be ignored!) you should know about.

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