Only 4 Days Left To Cash In On Emperor Entertainment Hotel Limited (HKG:296) Dividend
Readers hoping to buy Emperor Entertainment Hotel Limited (HKG:296) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. This means that investors who purchase shares on or after the 10th of December will not receive the dividend, which will be paid on the 20th of December.
Emperor Entertainment Hotel's next dividend payment will be HK$0.03 per share, and in the last 12 months, the company paid a total of HK$0.082 per share. Based on the last year's worth of payments, Emperor Entertainment Hotel stock has a trailing yield of around 5.2% on the current share price of HK$1.59. If you buy this business for its dividend, you should have an idea of whether Emperor Entertainment Hotel's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
Check out our latest analysis for Emperor Entertainment Hotel
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. Emperor Entertainment Hotel paid out a comfortable 25% of its profit last year. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It distributed 32% of its free cash flow as dividends, a comfortable payout level for most companies.
It's positive to see that Emperor Entertainment Hotel's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see how much of its profit Emperor Entertainment Hotel paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Readers will understand then, why we're concerned to see Emperor Entertainment Hotel's earnings per share have dropped 6.6% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, ten years ago, Emperor Entertainment Hotel has lifted its dividend by approximately 16% a year on average.
Final Takeaway
Is Emperor Entertainment Hotel an attractive dividend stock, or better left on the shelf? Emperor Entertainment Hotel has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. In summary, it's hard to get excited about Emperor Entertainment Hotel from a dividend perspective.
Keen to explore more data on Emperor Entertainment Hotel's financial performance? Check out our visualisation of its historical revenue and earnings growth.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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.
