Yahoo Finance HRnetGroup Limited (SGX:CHZ) Pays A S$0.0213 Dividend In Just Four Days
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see HRnetGroup Limited (SGX:CHZ) is about to trade ex-dividend in the next four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase HRnetGroup's shares on or after the 15th of May will not receive the dividend, which will be paid on the 24th of May.
The company's upcoming dividend is S$0.0213 a share, following on from the last 12 months, when the company distributed a total of S$0.04 per share to shareholders. Last year's total dividend payments show that HRnetGroup has a trailing yield of 5.7% on the current share price of S$0.705. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether HRnetGroup has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for HRnetGroup
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. HRnetGroup paid out 62% of its earnings to investors last year, a normal payout level for most businesses. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out more than half (67%) of its free cash flow in the past year, which is within an average range for most companies.
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 the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at HRnetGroup, with earnings per share up 6.3% on average over the last five years. Decent historical earnings per share growth suggests HRnetGroup has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past six years, HRnetGroup has increased its dividend at approximately 9.7% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Final Takeaway
Has HRnetGroup got what it takes to maintain its dividend payments? Earnings per share have been growing modestly and HRnetGroup paid out a bit over half of its earnings and free cash flow last year. In summary, while it has some positive characteristics, we're not inclined to race out and buy HRnetGroup today.
With that being said, if dividends aren't your biggest concern with HRnetGroup, you should know about the other risks facing this business. To that end, you should learn about the 2 warning signs we've spotted with HRnetGroup (including 1 which is a bit concerning).
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
