ApicHope Pharmaceutical Co., Ltd (SZSE:300723) pays a dividend of CN¥0.21 in just four days

Readers hoping to buy ApicHope Pharmaceutical Co., Ltd (SZSE:300723) for its dividend will need some action soon as the stock is about to trade ex-dividend. The ex-dividend date is generally set one business day before the record date. This is the cut-off date on which you, as a shareholder, must be present on the company’s books in order to receive the dividend. It is important to be aware of the ex-dividend date because any transaction on the stock must be settled on or before the record date. So, you can buy ApicHope Pharmaceutical shares before June 3 to receive the dividend that the company will pay on June 3.

The company’s upcoming dividend is CN¥0.21 per share, following on from the last twelve months when the company distributed a total of CN¥0.21 per share to shareholders. Based on the last year’s worth of payments, ApicHope Pharmaceutical stock has a trailing yield of around 1.0% on the current share price of CN¥21.34. Dividends are an important source of income for many shareholders, but the health of the company is crucial to maintaining those dividends. As a result, readers should always check whether ApicHope Pharmaceutical has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for ApicHope Pharmaceutical

Dividends are typically paid out of company income, so if a company pays out more than it earned then its dividend is usually at higher risk of being cut. ApicHope Pharmaceutical paid out 53% of its profits to investors last year, a normal payout level for most companies. Yet cash flow is usually more important than profit for assessing the sustainability of dividends, so we should always check whether the company generated enough cash to afford its dividend. Fortunately, dividend payments only took up 47% of free cash flow, which is a comfortable payout ratio.

It’s encouraging to see that the dividend is covered by both profits and cash flow. This generally suggests the dividend is sustainable, as long as earnings don’t drop precipitously.

Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.

SZSE:300723 Historical dividend May 29, 2024

Have profits and dividends grown?

When earnings decline, it becomes much more difficult to analyze and safely own dividend companies. Investors love dividends, so if earnings fall and the dividend is cut, you can expect a stock to be heavily sold off at the same time. That’s why it’s not ideal to see that ApicHope Pharmaceutical’s earnings per share have shrunk 4.1% per year over the past five years.

Many investors will judge a company’s dividend performance by evaluating how much the dividend payments have changed over time. Since our data began six years ago, ApicHope Pharmaceutical has increased its dividend by about 25% per year on average. Increasing the dividend payout ratio while earnings are falling can deliver nice returns for a while, but it’s always worth checking when the company can no longer increase the payout ratio – because that’s when the music stops.

It comes down to

Is ApicHope Pharmaceutical worth buying for its dividend? The payout ratios are within a reasonable range, implying the dividend can be sustainable. However, falling profits are a serious concern and could threaten the dividend in the future. In summary, it’s hard to get excited about ApicHope Pharmaceutical from a dividend perspective.

However, if you are still interested in ApicHope Pharmaceutical as a potential investment, you should definitely consider some of the risks associated with ApicHope Pharmaceutical. For example, ApicHope Pharmaceutical has 4 warning signs we believe you should be aware of this.

If you’re looking for strong dividend payers, we recommend it View our selection of top dividend stocks.

Valuation is complex, but we help make it simple.

Find out if ApicHope Pharmaceutical is potentially over or undervalued by checking out our comprehensive analysis, including: fair value estimates, risks and cautions, dividends, insider transactions and financial health.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

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