Dah Sing Financial Holdings Limited (HKG:440) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
It looks like Dah Sing Financial Holdings Limited (HKG:440) is about to go ex-dividend in the next 3 days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase Dah Sing Financial Holdings' shares before the 10th of September in order to receive the dividend, which the company will pay on the 24th of September.
The company's next dividend payment will be HK$1.20 per share, on the back of last year when the company paid a total of HK$2.58 to shareholders. Based on the last year's worth of payments, Dah Sing Financial Holdings stock has a trailing yield of around 5.4% on the current share price of HK$47.40. If you buy this business for its dividend, you should have an idea of whether Dah Sing Financial Holdings's dividend is reliable and sustainable. So we need to investigate whether Dah Sing Financial Holdings can afford its dividend, and if the dividend could grow.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Dah Sing Financial Holdings paid out a comfortable 40% of its profit last year.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
View our latest analysis for Dah Sing Financial Holdings
Click here to see how much of its profit Dah Sing Financial Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Dah Sing Financial Holdings's earnings per share have risen 13% 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, Dah Sing Financial Holdings has lifted its dividend by approximately 6.9% 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.
Final Takeaway
Should investors buy Dah Sing Financial Holdings for the upcoming dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. We think this is a pretty attractive combination, and would be interested in investigating Dah Sing Financial Holdings more closely.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, we've found 1 warning sign for Dah Sing Financial Holdings that we recommend you consider before investing in the business.
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.