If you’re keen on dividends to boost your wealth, pay attention! Jiangnan Mould & Plastic Technology Co., Ltd. (SZSE:000700) is going ex-dividend soon. This means you have a limited time to buy shares if you want to receive the upcoming dividend. The key date to remember is January 22nd. To qualify, you’ll need to purchase shares before that date, as the ex-dividend date comes a day before the record date when the company decides who gets dividends.
The next dividend payout is CN¥0.217 per share, and over the past year, the total dividends came to CN¥0.22 per share. With the current stock price at CN¥7.19, this gives Jiangnan a trailing yield of 3.0%. Dividends can be a vital income source, but a company must be financially healthy to keep paying them. That’s why it’s crucial to check if the dividend is supported by earnings and if those earnings are growing.
If a company pays out more than it earns, it risks cutting dividends. Luckily, Jiangnan Mould & Plastic Technology pays just 17% of its net profit as dividends, leaving a safety buffer. Moreover, it used only 30% of its free cash flow for dividends last year, which is a positive sign.
This indicates a stable dividend, provided earnings maintain their strength. Companies that see earnings growth usually make the best dividend payers. Jiangnan’s earnings have surged by an impressive 121% per year over the last five years. Because of this growth and the low payout ratio, it’s likely the company could enhance its dividends in the future.
When evaluating dividend performance, many investors also look at how dividends have changed over time. For Jiangnan, it’s encouraging that its dividends have increased at an average rate of about 31% per year over the last decade. Both earnings and dividends are on the rise, which is a great sign.
The Bottom Line
Can Jiangnan Mould & Plastic Technology maintain its dividend? Yes, it has managed to grow its earnings while reinvesting in its operations. Although the company has cut dividends at least once in the last decade, its conservative payout ratio bodes well for its current dividend’s sustainability. Overall, this is a company worth looking into further.
While Jiangnan Mould & Plastic Technology presents strong dividend potential, it’s important to stay informed about the risks tied to this stock. Notably, there are 2 warning signs you should know about.
Remember, it’s wise to carefully consider multiple options before investing in any dividend stock.
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