Jiangsu Tongxingbao Intelligent Transportation Technology (SZSE:301339) Is Increasing Its Dividend To CN¥0.30 – Simply Wall St

The board of Jiangsu Tongxingbao Intelligent Transportation Technology Co., Ltd. (SZSE:301339) has announced that it will be paying its dividend of CN¥0.30 on the 4th of July, an increased payment from last year’s comparable dividend. The payment will take the dividend yield to 1.5%, which is in line with the average for the industry.

See our latest analysis for Jiangsu Tongxingbao Intelligent Transportation Technology

Jiangsu Tongxingbao Intelligent Transportation Technology’s Payment Has Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn’t mean too much. Based on the last payment, Jiangsu Tongxingbao Intelligent Transportation Technology was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 111.8%. Assuming the dividend continues along recent trends, we think the payout ratio could be 30% by next year, which is in a pretty sustainable range.

Jiangsu Tongxingbao Intelligent Transportation Technology Is Still Building Its Track Record

It’s not possible for us to make a backward looking judgement just based on a short payment history. This doesn’t mean that the company can’t pay a good dividend, but just that we want to wait until it can prove itself.

Jiangsu Tongxingbao Intelligent Transportation Technology Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Jiangsu Tongxingbao Intelligent Transportation Technology has seen EPS rising for the last five years, at 9.8% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Jiangsu Tongxingbao Intelligent Transportation Technology Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Jiangsu Tongxingbao Intelligent Transportation Technology is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For instance, we’ve picked out 2 warning signs for Jiangsu Tongxingbao Intelligent Transportation Technology that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com