Lifestyle International Holdings Limited (HKG:1212) is about to trade ex-dividend in the next 4 days. You can purchase shares before the 4th of September in order to receive the dividend, which the company will pay on the 19th of September.
Lifestyle International Holdings's next dividend payment will be HK$0.30 per share. Last year, in total, the company distributed HK$0.67 to shareholders. Last year's total dividend payments show that Lifestyle International Holdings has a trailing yield of 7.6% on the current share price of HK$8.77. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Lifestyle International Holdings's payout ratio is modest, at just 49% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Thankfully its dividend payments took up just 46% of the free cash flow it generated, which is a comfortable payout ratio.
It's positive to see that Lifestyle International Holdings's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's not encouraging to see that Lifestyle International Holdings's earnings are effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Lifestyle International Holdings has increased its dividend at approximately 11% a year on average.
Has Lifestyle International Holdings got what it takes to maintain its dividend payments? While it's not great to see that earnings per share are effectively flat over the ten-year period we checked, at least the payout ratios are low and conservative. In summary, it's hard to get excited about Lifestyle International Holdings from a dividend perspective.
Wondering what the future holds for Lifestyle International Holdings? See what the five analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
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