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Times Neighborhood Holdings Limited’s (HKG: 9928) The dividend will increase to HK $ 0.086 on July 2. This brings the annual payout to 1.6% of the current share price, which is roughly around the industry average.
Check out our latest analysis for Times Neighborhood Holdings
Times Neighborhood Holdings income easily covers distributions
Unless the payments are sustainable, the dividend yield doesn’t mean too much. Based on the last payment, Times Neighborhood Holdings was only paying a fraction of the income, but the payment was 172% of the cash flow. While the company may be trying to establish a balanced dividend policy, such a high cash payout ratio could expose the dividend to a reduction if the company runs into trouble.
Next year is expected to see BPA increase by 66.5%. If the dividend continues on this path, the payout ratio could be 21% by next year, which we believe can be quite sustainable going forward.
Times Neighborhood Holdings does not have a long payment history
Without a history of dividend payments, we cannot judge its stability. It doesn’t mean the company can’t pay a good dividend, just that we want to wait until we can prove ourselves.
The dividend is expected to increase
Investors who have held shares of the company for the past several years will be pleased with the dividend income they have received. Times Neighborhood Holdings earnings per share are up 92% from a year ago. It’s nice to see earnings per share go up, but a year is too short a time to be excited about. If this trend continued, we would be interested. A low payout ratio gives the company great flexibility, and the growth in earnings also allows it to increase the dividend very easily. Any year of performance can be misleading for a variety of reasons, so we wouldn’t want to draw any solid conclusions based on these numbers alone.
In summary
Overall, it’s probably not a great income value, although the dividend is increased at the moment. While Times Neighborhood Holdings earns enough to cover the dividend, we are generally not impressed with its prospects for the future. We would probably look elsewhere for an income investment.
Market movements attest to the high value of a coherent dividend policy compared to a more unpredictable policy. At the same time, there are other factors that our readers should be aware of before injecting capital into a stock. Taking the debate a little further, we have identified 2 warning signs for Times Neighborhood Holdings that investors need to be aware of moving forward. Looking for more high yield dividend ideas? Try our organized list of good dividend payers.
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