Unveiling Digital China Holdings Ltd's Dividend Dynamics: An In-depth Analysis
A Comprehensive Review of the Dividend Performance, Growth, and Sustainability of Digital China Holdings Ltd (DCHIY)
Digital China Holdings Ltd (DCHIY) recently announced a dividend of $0.01 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-09-13. 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 deep dive into Digital China Holdings Ltd's dividend performance and assess its sustainability.
Company Overview: Digital China Holdings Ltd
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Digital China Holdings Ltd is a holding company that, through its subsidiaries, provides information technology services. The company organizes itself into three primary segments based on services provided: The Big Data Products and Solutions business segment, The Software and Operating Services business segment, and The Traditional and Localization Services business segment. The company generates a majority of its revenue from the Traditional and Localization Services segment.
Historical Dividend Payments: A Consistent Record
Digital China Holdings Ltd has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a bi-annual basis. The chart below illustrates the annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth: A Closer Look
As of today, Digital China Holdings Ltd currently has a 12-month trailing dividend yield of 2.64% and a 12-month forward dividend yield of 2.14%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Digital China Holdings Ltd's annual dividend growth rate was 68.00%. Based on Digital China Holdings Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Digital China Holdings Ltd stock as of today is approximately 2.64%.
Assessing Dividend Sustainability: 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 2023-06-30, Digital China Holdings Ltd's dividend payout ratio is 0.59.
Digital China Holdings Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Digital China Holdings Ltd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Digital China Holdings Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Digital China Holdings Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Digital China Holdings Ltd's revenue has increased by approximately 6.80% per year on average, a rate that underperforms approximately 53.11% 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, Digital China Holdings Ltd's earnings increased by approximately 7.60% per year on average, a rate that underperforms approximately 53.3% of global competitors.
The Final Word
In conclusion, Digital China Holdings Ltd's consistent dividend payments, robust growth rate, and a reasonable payout ratio underscore its commitment to rewarding shareholders. However, the expected decrease in dividend payments over the next 12 months and the underperformance in revenue and EPS growth rate relative to global competitors warrant a cautious approach. Investors should continue to monitor these key metrics to make informed decisions.
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This article first appeared on GuruFocus.
