Daxin Materials: A Dividend AnalysisDaxin Materials: A Dividend Analysis Daxin Materials Corporation (TWSE:5234) is a company that offers attractive dividends to its shareholders. Let’s delve into the company’s dividend metrics to understand its sustainability and growth potential. Ex-Dividend Date The ex-dividend date for Daxin Materials is three days before the record date, which is when shareholders must be on the company’s books to receive dividends. This means that investors must purchase shares of Daxin Materials before July 4 to receive the dividend, which will be paid on July 31. Dividend Yield Daxin Materials has a rolling dividend yield of approximately 2.8% based on the current share price of NT$147.50 and the previous 12 months of dividend payments. This indicates that the company distributes a significant portion of its earnings to shareholders. Dividend Coverage Dividends are typically paid out of corporate earnings, so it’s important to assess whether the company’s profits cover the dividend payments. Daxin Materials has a dividend payout ratio of 78%, meaning that it pays out most of its income. While this is acceptable, it also means that there is a relatively low reinvestment of earnings, which could potentially slow future growth. Free Cash Flow Coverage In addition to earnings, we can also evaluate the company’s free cash flow coverage of dividends. Dividends consumed 55% of the company’s free cash flow last year. This is within a normal range for most dividend-paying organizations, suggesting that the dividend is supported by both earnings and cash flow. Historical Earnings and Dividend Growth Over the past five years, Daxin Materials’ earnings per share have declined by an average of 3.8% per year. While this is a concern, it’s important to note that the company has increased its dividend by an average of 4.7% per year over the past decade. This suggests that the company has prioritized dividend growth, even during periods of declining earnings. Conclusion Daxin Materials is a company that offers an attractive dividend yield, but investors should be aware of the potential risks. The company’s declining earnings and high dividend payout ratio raise some concerns about the sustainability of the dividend in the future. However, the company’s positive free cash flow coverage of dividends and historical dividend growth provide some reassurance. Ultimately, investors should carefully consider these factors before making a decision about investing in Daxin Materials.
Regular readers know we love our dividends at Simply Wall St., which is why it’s exciting to see Daxin Materials Corporation (TWSE:5234) is about to trade ex-dividend in the next 3 days. The ex-dividend date occurs one day before the record date, which is the day shareholders must be on the company’s books to receive dividends. The ex-dividend date is an important date to pay attention to, as any purchase of the shares on or after this date could result in a late settlement that will not be reflected on the record date. This means that you must purchase shares of Daxin Materials before July 4 to receive the dividend, which will be paid on July 31.
The company’s upcoming dividend is NT$4.10 per share, following on from the last twelve months when the company distributed a total of NT$4.10 per share to shareholders. Based on the last year’s worth of payments, Daxin Materials stock has a rolling yield of approximately 2.8% on the current share price of NT$147.50. Dividends make an important contribution to investment returns for long-term owners, but only if the dividend continues to be paid. We need to see if the dividend is covered by profits and if it grows.
Check out our latest analysis for Daxin Materials
Dividends are typically paid out of corporate income, so if a company pays out more than it earns, there is a greater risk that the dividend will be cut. The dividend payout ratio is 78% of earnings, meaning that the company pays out most of its income. The relatively low reinvestment of earnings could slow future earnings growth. This could become a concern if earnings were to start declining. A useful secondary check can be to evaluate whether Daxin Materials generated enough free cash flow to pay its dividend. Dividends consumed 55% of the company’s free cash flow last year, which is within a normal range for most dividend-paying organizations.
It’s positive to see that Daxin Materials’ dividend is covered by both profits and cash flow. This is usually a sign that the dividend is sustainable. Additionally, a lower payout ratio usually indicates a greater margin of safety before the dividend is cut.
Click here to see how much profit Daxin Materials has paid out over the past 12 months.
TWSE:5234 Historical dividend June 30, 2024
Have profits and dividends increased?
Companies with declining profits are riskier for dividend shareholders. If business goes into a recession and the dividend is cut, the company’s value could fall dramatically. That’s why it’s not ideal to see Daxin Materials’ earnings per share have shrunk by 3.8% per year over the past five years.
Another important way to gauge a company’s dividend prospects is to look at its historical rate of dividend growth. Over the past decade, Daxin Materials has increased its dividend by an average of around 4.7% per year. That’s intriguing, but the combination of growing dividends despite declining profits can usually only be achieved by paying out a higher percentage of profits. Daxin Materials already pays out 78% of its profits, and given declining profits, we think it’s unlikely that this dividend will grow quickly in the future.
The summing up
Is Daxin Materials an attractive dividend share, or is it better left on the shelf? It’s never good to see earnings per share shrink, but dividend payout ratios at least seem reasonable. However, we are aware that if earnings continue to decline, the dividend could be at risk. From a dividend perspective, this isn’t the most attractive proposition, and we’d probably pass on this for now.
However, if you are still interested in Daxin Materials and want to learn more, you will find it very useful to know what risks this stock faces. Our analysis shows 3 warning signs for Daxin Materials which we highly recommend you review before investing in the company.
In general, we don’t recommend just buying the first dividend stock you see. Here’s a compiled list of interesting stocks that are strong dividend payers.
Valuation is complex, but we help make it simple.
Find out whether Daxin Materials may be over or undervalued by exploring our comprehensive analysis, including: fair value estimates, risks and cautions, dividends, insider transactions and financial health.
View the Free Analysis
Do you have feedback on this article? Are you concerned about the content? Contact Us directly with us. You can also send an email to editorial-team (at) simplywallst.com.
This article from Simply Wall St is of a general nature. We comment exclusively on the basis of historical data and analyst forecasts and use an objective methodology. Our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or financial situation. We aim to provide you with focused long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in the shares mentioned.
Valuation is complex, but we make it simple.
Find out if Daxin Materials may be over or undervalued by checking out our comprehensive analysis, including: fair value estimates, risks and cautions, dividends, insider transactions and financial health.
View the free analysis
Do you have feedback on this article? Concerned about the content? Contact us directly. You can also send an email to [email protected]
-1000x708.png)
