Dah Sing Banking Group Limited (HKG:2356) stock is about to trade ex-dividend in 3 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. Meaning, you will need to purchase Dah Sing Banking Group's shares before the 7th of September to receive the dividend, which will be paid on the 21st of September.
The company's next dividend payment will be HK$0.11 per share, and in the last 12 months, the company paid a total of HK$0.40 per share. Calculating the last year's worth of payments shows that Dah Sing Banking Group has a trailing yield of 7.4% on the current share price of HK$5.37. If you buy this business for its dividend, you should have an idea of whether Dah Sing Banking Group's dividend is reliable and sustainable. As a result, readers should always check whether Dah Sing Banking Group has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Dah Sing Banking Group
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. Fortunately Dah Sing Banking Group's payout ratio is modest, at just 35% of profit.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Dah Sing Banking Group's earnings per share have fallen at approximately 5.8% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Dah Sing Banking Group has lifted its dividend by approximately 2.6% a year on average.
To Sum It Up
Is Dah Sing Banking Group an attractive dividend stock, or better left on the shelf? Dah Sing Banking Group's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It doesn't appear an outstanding opportunity, but could be worth a closer look.
So if you want to do more digging on Dah Sing Banking Group, you'll find it worthwhile knowing the risks that this stock faces. Every company has risks, and we've spotted 1 warning sign for Dah Sing Banking Group you should know about.
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.