Hengfeng Info Expertise (SZSE:300605) Will Pay A Dividend Of CN¥0.04

The board of Hengfeng Info Expertise Co., Ltd. (SZSE:300605) has introduced that it’s going to pay a dividend on the third of July, with buyers receiving CN¥0.04 per share. This implies the annual cost will likely be 0.4% of the present inventory value, which is decrease than the business common.

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Hengfeng Info Expertise Would not Earn Sufficient To Cowl Its Funds

The dividend yield is just a little bit low, however sustainability of the funds can be an essential a part of evaluating an revenue inventory. Based mostly on the final cost, earnings had been truly smaller than the dividend, and the corporate was truly spending additional cash than it was making. Paying out such a big dividend in comparison with earnings whereas additionally not producing any free money stream would undoubtedly be tough to maintain up.

EPS is about to fall by 33.4% over the following 12 months if latest tendencies proceed. If the dividend continues alongside the trail it has been on just lately, the payout ratio in 12 months could possibly be 148%, which is certainly a bit excessive to be sustainable going ahead.

SZSE:300605 Historic Dividend June thirtieth 2024

Hengfeng Info Expertise’s Dividend Has Lacked Consistency

It is comforting to see that Hengfeng Info Expertise has been paying a dividend for various years now, nevertheless it has been reduce no less than as soon as in that point. If the corporate cuts as soon as, it undoubtedly is not argument towards the opportunity of it slicing sooner or later. The dividend has gone from an annual whole of CN¥0.0257 in 2017 to the latest whole annual cost of CN¥0.04. This means that the corporate grew its distributions at a yearly charge of about 6.5% over that period. It is good to see the dividend rising at a good charge, however the dividend has been reduce no less than as soon as prior to now. Hengfeng Info Expertise may need put its home so as since then, however we stay cautious.

Dividend Development Potential Is Shaky

On condition that the dividend has been reduce prior to now, we have to verify if earnings are rising and if that may result in stronger dividends sooner or later. Hengfeng Info Expertise’s earnings per share has shrunk at 33% a yr over the previous 5 years. This steep decline can point out that the enterprise goes by way of a tricky time, which might constrain its capacity to pay a bigger dividend every year sooner or later.

We’re Not Large Followers Of Hengfeng Info Expertise’s Dividend

General, whereas some is perhaps happy that the dividend wasn’t reduce, we expect this may increasingly assist Hengfeng Info Expertise make extra constant funds sooner or later. The corporate appears to be stretching itself a bit to make such massive funds, but it surely does not seem they are often constant over time. General, the dividend shouldn’t be dependable sufficient to make this a superb revenue inventory.

Traders tend to favour corporations with a constant, steady dividend coverage versus these working an irregular one. On the similar time, there are different components our readers ought to take heed to earlier than pouring capital right into a inventory. To that finish, Hengfeng Info Expertise has 5 warning indicators (and a pair of that are probably severe) we expect you must find out about. Is Hengfeng Info Expertise not fairly the chance you had been in search of? Why not take a look at our choice of high dividend shares.

Valuation is complicated, however we’re serving to make it easy.

Discover out whether or not Hengfeng Info Expertise is probably over or undervalued by trying out our complete evaluation, which incorporates honest worth estimates, dangers and warnings, dividends, insider transactions and monetary well being.

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This text by Merely Wall St is basic in nature. We offer commentary based mostly on historic information and analyst forecasts solely utilizing an unbiased methodology and our articles aren’t meant to be monetary recommendation. It doesn’t represent a advice to purchase or promote any inventory, and doesn’t take account of your goals, or your monetary state of affairs. We goal to convey you long-term centered evaluation pushed by elementary information. Word that our evaluation might not issue within the newest price-sensitive firm bulletins or qualitative materials. Merely Wall St has no place in any shares talked about.

Valuation is complicated, however we’re serving to make it easy.

Discover out whether or not Hengfeng Info Expertise is probably over or undervalued by trying out our complete evaluation, which incorporates honest worth estimates, dangers and warnings, dividends, insider transactions and monetary well being.

View the Free Evaluation

Have suggestions on this text? Involved concerning the content material? Get in contact with us immediately. Alternatively, e-mail editorial-team@simplywallst.com

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