Bright Scholar Education Holdings (NYSE:BEDU) Has Re-Affirmed Its Dividend Of US$0.11
Bright Scholar Education Holdings Limited's (NYSE:BEDU) investors are due to receive a payment of US$0.11 per share on 16th of August. Based on this payment, the dividend yield on the company's stock will be 2.9%, which is an attractive boost to shareholder returns.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Bright Scholar Education Holdings' stock price has reduced by 36% in the last 3 months, which is not ideal for investors and can explain a sharp increase in the dividend yield.
View our latest analysis for Bright Scholar Education Holdings
Bright Scholar Education Holdings' Dividend Is Well Covered By Earnings
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. The last dividend was quite easily covered by Bright Scholar Education Holdings' earnings. This means that a large portion of its earnings are being retained to grow the business.
Over the next year, EPS could expand by 8.5% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 7.4% by next year, which is in a pretty sustainable range.
Bright Scholar Education Holdings Is Still Building Its Track Record
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The first annual payment during the last 2 years was CN¥0.69 in 2019, and the most recent fiscal year payment was CN¥0.78. This implies that the company grew its distributions at a yearly rate of about 6.4% over that duration. The dividend has been growing as a reasonable rate, which we like. However, investors will probably want to see a longer track record before they consider Bright Scholar Education Holdings to be a consistent dividend paying stock.
The Dividend Has Growth Potential
The company's investors will be pleased to have been receiving dividend income for some time. Bright Scholar Education Holdings has seen EPS rising for the last five years, at 8.5% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.
Bright Scholar Education Holdings Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Bright Scholar Education Holdings might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 4 warning signs for Bright Scholar Education Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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