Yahoo Finance China Everbright Ltd's Dividend Analysis
Exploring the Sustainability and Performance of Dividends
China Everbright Ltd (CEVIF) recently announced a dividend of $0.1 per share, payable on 2024-06-14, with the ex-dividend date set for 2024-05-28. 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 look into China Everbright Ltd's dividend performance and assess its sustainability.
What Does China Everbright Ltd Do?
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China Everbright Ltd is an investment management firm based predominantly in Hong Kong. The company's core activity includes investing in long-term investment vehicles to secure capital appreciation for its investors. Its investment portfolio is comprised of unlisted equity securities, equity derivatives, start-up, and development-stage companies, and long-term equity. The company's operating segments include Fund Management Business and Principal Investments Business. Geographically, it generates maximum revenue from Mainland China.
A Glimpse at China Everbright Ltd's Dividend History
China Everbright Ltd has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down China Everbright Ltd's Dividend Yield and Growth
As of today, China Everbright Ltd currently has a 12-month trailing dividend yield of 6.27% and a 12-month forward dividend yield of 4.18%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, China Everbright Ltd's annual dividend growth rate was -6.80%. Extended to a five-year horizon, this rate decreased to -15.40% per year. And over the past decade, China Everbright Ltd's annual dividends per share growth rate stands at 0.40%.
Based on China Everbright Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of China Everbright Ltd stock as of today is approximately 2.72%.
The Sustainability Question: 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 2023-12-31, China Everbright Ltd's dividend payout ratio is 0.00.
China Everbright Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks China Everbright Ltd's profitability 4 out of 10 as of 2023-12-31, suggesting the dividend may not be sustainable. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. China Everbright Ltd's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and China Everbright Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. China Everbright Ltd's revenue has increased by approximately 9.00% per year on average, a rate that outperforms approximately 51.89% of global competitors.
Conclusion: Evaluating Dividend Sustainability
While China Everbright Ltd offers a compelling dividend yield, the sustainability of its dividends is under scrutiny due to its negative growth rates and low profitability rank. Investors should consider these factors along with the company's solid revenue growth when evaluating the stock for investment. For those looking to explore further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
