Is It Worth Considering Tse Sui Luen Jewellery (International) Limited (HKG:417) For Its Upcoming Dividend?

Simply Wall St ·  09/11/2022 08:35

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 Tse Sui Luen Jewellery (International) Limited (HKG:417) is about to go ex-dividend in just 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Tse Sui Luen Jewellery (International)'s shares on or after the 15th of September will not receive the dividend, which will be paid on the 6th of October.

The company's upcoming dividend is HK$0.02 a share, following on from the last 12 months, when the company distributed a total of HK$0.02 per share to shareholders. Last year's total dividend payments show that Tse Sui Luen Jewellery (International) has a trailing yield of 1.7% on the current share price of HK$1.15. If you buy this business for its dividend, you should have an idea of whether Tse Sui Luen Jewellery (International)'s dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Tse Sui Luen Jewellery (International)

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. Tse Sui Luen Jewellery (International) paid out a comfortable 32% of its profit last year.

Click here to see how much of its profit Tse Sui Luen Jewellery (International) paid out over the last 12 months.

historic-dividendSEHK:417 Historic Dividend September 11th 2022

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Tse Sui Luen Jewellery (International)'s earnings per share have fallen at approximately 8.0% a year over the previous five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Tse Sui Luen Jewellery (International)'s dividend payments per share have declined at 17% per year on average over the past 10 years, which is uninspiring. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

To Sum It Up

Is Tse Sui Luen Jewellery (International) an attractive dividend stock, or better left on the shelf? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. We think this is a pretty attractive combination, and would be interested in investigating Tse Sui Luen Jewellery (International) more closely.

While it's tempting to invest in Tse Sui Luen Jewellery (International) for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 3 warning signs for Tse Sui Luen Jewellery (International) that you should be aware of before investing in their shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.

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