It looks like Oriental Explorer Holdings Limited (HKG:430) is about to go ex-dividend in the next 4 days. The ex-dividend date occurs one day 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 important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Oriental Explorer Holdings' shares on or after the 26th of September will not receive the dividend, which will be paid on the 20th of October.

The company's upcoming dividend is HK$0.008 a share, following on from the last 12 months, when the company distributed a total of HK$0.028 per share to shareholders. Looking at the last 12 months of distributions, Oriental Explorer Holdings has a trailing yield of approximately 7.3% on its current stock price of HK$0.385. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Oriental Explorer Holdings

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. Oriental Explorer Holdings paid out more than half (64%) of its earnings last year, which is a regular payout ratio for most companies.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Oriental Explorer Holdings paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're discomforted by Oriental Explorer Holdings's 29% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Given that Oriental Explorer Holdings has only been paying a dividend for a year, there's not much of a past history to draw insight from.

The Bottom Line

Is Oriental Explorer Holdings worth buying for its dividend? Earnings per share have been declining and the company is paying out more than half its profits to shareholders; not an enticing combination. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

Although, if you're still interested in Oriental Explorer Holdings and want to know more, you'll find it very useful to know what risks this stock faces. Our analysis shows 5 warning signs for Oriental Explorer Holdings that we strongly recommend you have a look at before investing in the company.

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.