Vinda International Holdings (HKG:3331) dividend will be HK$0.10

Vinda International Holdings Limited (HKG:3331) announced that it will pay a dividend of $0.10 per share on September 7. This means that the dividend yield will be fairly typical at 2.3%.

Check out our latest analysis for Vinda International Holdings

Vinda International Holdings payment has strong earnings coverage

We like a dividend to be consistent over the long term, so it’s important to check if it’s sustainable. Prior to this announcement, Vinda International Holdings’ dividend was comfortably covered by both cash flow and earnings. This means that a large portion of his income is kept to grow the business.

Over the next year, EPS is expected to increase by 84.7%. Assuming the dividend continues on recent trends, we think the payout ratio could be 31% by next year, which is in a fairly sustainable range.

SEHK:3331 Historic dividend July 24, 2022

Dividend volatility

The company’s dividend history has been marked by instability, with at least one decline over the past 10 years. Since 2012, the dividend has increased from HK$0.12 in total per year to HK$0.50. This equates to a compound annual growth rate (CAGR) of approximately 15% per year during this period. Dividends have grown rapidly over this period, but with cuts in the past, we’re not sure this stock will be a reliable source of income in the future.

The dividend should increase

Since the dividend has been reduced in the past, we need to check if earnings are increasing and if this could lead to higher dividends in the future. Vinda International Holdings has seen EPS increase over the past five years, at 14% per year. The company pays a reasonable amount of profit to shareholders and is growing its earnings at a decent rate, so we think it could be a decent dividend-paying stock.

Vinda International Holdings Looks Like a Big Dividend Stock

Overall, we think it’s a great income investment and we think keeping the dividend this year may have been a prudent choice. Distributions are quite easily covered by earnings, which are also converted into cash flow. Considering all of that, it looks like a good dividend opportunity.

Companies with a stable dividend policy are likely to enjoy greater investor interest than those that suffer from a more inconsistent approach. Yet investors must consider a host of other factors, aside from dividend payments, when analyzing a company. Pushing the debate a little further, we have identified 1 warning sign for Vinda International Holdings that investors should be aware of going forward. Is Vinda International Holdings not quite the opportunity you were looking for? Why not check out our selection of the best dividend stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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