Post Reply
1-4 of 4
It looks like New Toyo International Holdings Ltd (SGX:N08) is about to go ex-dividend in the next four days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company' s books as a shareholder in order to receive the 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. In other words, investors can purchase New Toyo International Holdings' shares before the 6th of May in order to be eligible for the dividend, which will be paid on the 16th of May.
The company' s next dividend payment will be S$0.01 per share, and in the last 12 months, the company paid a total of S$0.02 per share. Looking at the last 12 months of distributions, New Toyo International Holdings has a trailing yield of approximately 7.8% on its current stock price of S$0.255. 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 check whether the dividend payments are covered, and if earnings are growing.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. New Toyo International Holdings paid out more than half (65%) of its earnings last year, which is a regular payout ratio for most companies. 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 distributed 50% of its free cash flow as dividends, a comfortable payout level 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 how much of its profit New Toyo International Holdings paid out over the last 12 months.
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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It' s encouraging to see New Toyo International Holdings has grown its earnings rapidly, up 25% a year for the past five years. The current payout ratio suggests a good balance between rewarding shareholders with dividends, and reinvesting in growth. Earnings per share have been growing quickly and in combination with some reinvestment and a middling payout ratio, the stock may have decent dividend prospects going forwards.
Another key way to measure a company' s dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, New Toyo International Holdings has lifted its dividend by approximately 1.6% a year on average. It' s good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
To Sum It Up
Has New Toyo International Holdings got what it takes to maintain its dividend payments? We like New Toyo International Holdings' s growing earnings per share and the fact that - while its payout ratio is around average - it paid out a lower percentage of its cash flow. There' s a lot to like about New Toyo International Holdings, and we would prioritise taking a closer look at it.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example - New Toyo International Holdings has 2 warning signs we think you should be aware of.
Generally, we wouldn' t recommend just buying the first dividend stock you see. Here' s a curated list of interesting stocks that are strong dividend payers.
COMPANY DOING BUY BACKS AGGRESIVELY.
So what do you think this company is worth?
New Toyo is a SGX listed company that is in the packaging printing business. I have been following the company for several years and I would like to summarize the current situation as follows:
For more details go to my blog article. I even have a 3 min video for the " tik-tok" generation in the blog article. FYI, I have used New Toyo to test the moomoo platform for fundamental analysis. Refer to New Toyo International &ndash a fundamental analysis using the moomoo platform
- New Toyo is facing challenges in its legacy packaging printing business, a mature sector, and needs growth from new ventures.
- The company is considered a cigar-butt investment, with a margin of safety based on its Asset Value, but overall returns are lower than the cost of capital due to underperforming segments.
- The management' s turnaround efforts seem sustainable, but there are concerns about its ability to diversify successfully. They have a poor diversification track record.
- New Toyo has a strong customer concentration risk, with a single customer contributing about half of its revenue, likely in the tobacco industry.
- The company' s financial position is relatively strong, with low Debt Equity ratio and positive Cash Flow from Operations, but its growth prospects remain uncertain.
For more details go to my blog article. I even have a 3 min video for the " tik-tok" generation in the blog article. FYI, I have used New Toyo to test the moomoo platform for fundamental analysis. Refer to New Toyo International &ndash a fundamental analysis using the moomoo platform