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Four Days Left To Buy Highway Holdings Limited (NASDAQ:HIHO) Before The Ex-Dividend Date

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Highway Holdings Limited (NASDAQ:HIHO) is about to trade ex-dividend in the next 4 days. If you purchase the stock on or after the 26th of February, you won't be eligible to receive this dividend, when it is paid on the 8th of April.

Highway Holdings's upcoming dividend is US$0.02 a share, following on from the last 12 months, when the company distributed a total of US$0.18 per share to shareholders. Based on the last year's worth of payments, Highway Holdings has a trailing yield of 3.7% on the current stock price of $4.9207. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Highway 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. That's why it's good to see Highway Holdings paying out a modest 49% of its earnings.

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

historic-dividend
historic-dividend

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. With that in mind, we're discomforted by Highway Holdings's 12% per annum decline in earnings in the past 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. In the past 10 years, Highway Holdings has increased its dividend at approximately 8.4% a year on average.

Final Takeaway

Is Highway Holdings an attractive dividend stock, or better left on the shelf? Highway Holdings has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. In summary, it's hard to get excited about Highway Holdings from a dividend perspective.

If you're not too concerned about Highway Holdings's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. To help with this, we've discovered 4 warning signs for Highway Holdings (1 doesn't sit too well with us!) that you ought to be aware of before buying the shares.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.