Weichai Power Co Ltd's Dividend Analysis

GuruFocus Research

Fri, May 31, 2024, 5:05 AM 4 min read

Exploring the Dividend Performance and Sustainability of Weichai Power

Weichai Power Co Ltd (WEICF) recently announced a dividend of $0.32 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-05-31. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Weichai Power Co Ltd's dividend performance and assess its sustainability.

What Does Weichai Power Co Ltd Do?

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Weichai Power Co Ltd is an industrial technology company that offers vehicles and equipment manufacturing, and logistics and supply chain services in China. The operating segments of the company are; Engines segment which includes the manufacturing and sale of engines and related parts; Automobiles and automobile components which includes the manufacturing and sale of automobiles and automobile components other than Engines; Agricultural equipment includes the manufacturing and sale of agricultural equipment (complete machineries), agricultural machineries, agricultural vehicles, and related parts; and the Intelligent logistics segment which generates key revenue, includes forklift trucks production, warehousing technology, and supply chain solution services.

Weichai Power Co Ltd's Dividend Analysis

A Glimpse at Weichai Power Co Ltd's Dividend History

Weichai Power Co Ltd has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Weichai Power Co Ltd's Dividend Yield and Growth

As of today, Weichai Power Co Ltd currently has a 12-month trailing dividend yield of 2.90% and a 12-month forward dividend yield of 3.96%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Weichai Power Co Ltd's annual dividend growth rate was 10.30%. Extended to a five-year horizon, this rate decreased to -4.10% per year. And over the past decade, Weichai Power Co Ltd's annual dividends per share growth rate stands at an impressive 18.90%.

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, Weichai Power Co Ltd's dividend payout ratio is 0.29. Weichai Power Co Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Weichai Power Co Ltd's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. Weichai Power Co Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Weichai Power Co Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Weichai Power Co Ltd's revenue has increased by approximately -0.20% per year on average, a rate that underperforms than approximately 73.62% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Weichai Power Co Ltd's earnings increased by approximately -5.10% per year on average, a rate that underperforms than approximately 70.16% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -9.40%, which underperforms than approximately 83.53% of global competitors.

Conclusion

Considering Weichai Power Co Ltd's consistent dividend payments, robust payout ratio, and solid profitability rank, the company presents an attractive opportunity for dividend-seeking investors. However, its mixed growth metrics suggest a need for cautious optimism regarding long-term sustainability. Investors should keep an eye on future earnings and revenue growth to ensure continued dividend reliability. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

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