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Why You Might Be Interested In Tian An China Investments Company Limited (HKG:28) For Its Upcoming Dividend

Readers hoping to buy Tian An China Investments Company Limited (HKG:28) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Investors can purchase shares before the 7th of April in order to be eligible for this dividend, which will be paid on the 14th of April.

Tian An China Investments's next dividend payment will be HK$0.20 per share. Last year, in total, the company distributed HK$0.20 to shareholders. Last year's total dividend payments show that Tian An China Investments has a trailing yield of 6.6% on the current share price of HK$3.01. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Tian An China Investments has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Tian An China Investments

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Tian An China Investments is paying out just 22% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

Click here to see how much of its profit Tian An China Investments paid out over the last 12 months.

SEHK:28 Historical Dividend Yield April 3rd 2020
SEHK:28 Historical Dividend Yield April 3rd 2020

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see Tian An China Investments earnings per share are up 2.9% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past ten years, Tian An China Investments has increased its dividend at approximately 21% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

From a dividend perspective, should investors buy or avoid Tian An China Investments? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, Tian An China Investments looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in Tian An China Investments for the dividends alone, you should always be mindful of the risks involved. For instance, we've identified 3 warning signs for Tian An China Investments (1 is significant) you should be aware of.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.