Yahoo Finance 4 Days To Buy Soundwill Holdings Limited (HKG:878) Before The Ex-Dividend Date
Soundwill Holdings Limited (HKG:878) is about to trade ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 1st of June will not receive the dividend, which will be paid on the 18th of June.
Soundwill Holdings's next dividend payment will be HK$0.20 per share, on the back of last year when the company paid a total of HK$0.20 to shareholders. Based on the last year's worth of payments, Soundwill Holdings stock has a trailing yield of around 2.9% on the current share price of HK$6.96. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Soundwill Holdings can afford its dividend, and if the dividend could grow.
View our latest analysis for Soundwill Holdings
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. That's why it's good to see Soundwill Holdings paying out a modest 26% of its earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. The good news is it paid out just 17% of its free cash flow in the last year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see how much of its profit Soundwill Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Soundwill Holdings's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 33% a year over the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, ten years ago, Soundwill Holdings has lifted its dividend by approximately 7.2% a year on average.
To Sum It Up
Is Soundwill Holdings worth buying for its dividend? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. To summarise, Soundwill Holdings looks okay on this analysis, although it doesn't appear a stand-out opportunity.
In light of that, while Soundwill Holdings has an appealing dividend, it's worth knowing the risks involved with this stock. For instance, we've identified 4 warning signs for Soundwill Holdings (1 can't be ignored) you should be aware of.
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.
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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. Thank you for reading.
