China Gas Holdings Ltd's Dividend Analysis
Assessing the Sustainability and Growth of CGHOF's Dividends
China Gas Holdings Ltd (CGHOF) recently announced a dividend of $0.15 per share, payable on 2024-02-02, with the ex-dividend date set for 2024-01-04. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into China Gas Holdings Ltd's dividend performance and assess its sustainability.
What Does China Gas Holdings Ltd Do?
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China Gas Holdings is involved in the wholesale and retail businesses of natural gas and liquefied petroleum gas in China. As of fiscal 2023 (ended March 31, 2023), the group had secured a total of 661 piped gas concessions, 533 compressed natural gas/liquefied natural gas refilling stations for vehicles, and 106 LPG distribution projects in China. In total, CGHOF has connected 45.4 million residential households and achieved a penetration rate of 68.6%.
A Glimpse at China Gas Holdings Ltd's Dividend History
China Gas Holdings Ltd has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a bi-annually basis.
China Gas Holdings Ltd has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down China Gas Holdings Ltd's Dividend Yield and Growth
As of today, China Gas Holdings Ltd currently has a 12-month trailing dividend yield of 7.24% and a 12-month forward dividend yield of 7.97%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, China Gas Holdings Ltd's annual dividend growth rate was 6.10%. Extended to a five-year horizon, this rate increased to 14.80% per year. And over the past decade, China Gas Holdings Ltd's annual dividends per share growth rate stands at an impressive 25.60%.
Based on China Gas Holdings Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of China Gas Holdings Ltd stock as of today is approximately 14.44%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, China Gas Holdings Ltd's dividend payout ratio is 0.92, which may suggest that the company's dividend may not be sustainable.
China Gas Holdings Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks China Gas Holdings Ltd's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. China Gas Holdings Ltd's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and China Gas Holdings Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. China Gas Holdings Ltd's revenue has increased by approximately 14.40% per year on average, a rate that outperforms approximately 72.58% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, China Gas Holdings Ltd's earnings increased by approximately -22.90% per year on average, a rate that outperforms approximately 14.68% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -5.70%, which outperforms approximately 21.65% of global competitors.
Concluding Insights on China Gas Holdings Ltd's Dividends
Considering China Gas Holdings Ltd's consistent dividend growth, its robust yield, and the company's strong profitability rank, investors might view CGHOF as a potentially attractive dividend-paying stock. However, the payout ratio and mixed growth metrics also signal the need for careful consideration of the company's future earnings and dividend sustainability. Value investors should weigh these factors along with industry trends, regulatory changes, and strategic company initiatives when making investment decisions. Will China Gas Holdings Ltd continue to be a reliable source of dividends for your portfolio? GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to explore further.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
