It looks like Get Nice Holdings Limited (HKG:64) is about to go ex-dividend in the next 3 days. You will need to purchase shares before the 29th of August to receive the dividend, which will be paid on the 10th of September.
Get Nice Holdings's next dividend payment will be HK$0.01 per share, and in the last 12 months, the company paid a total of HK$0.02 per share. Based on the last year's worth of payments, Get Nice Holdings stock has a trailing yield of around 7.8% on the current share price of HK$0.255. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Get Nice Holdings has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Get Nice Holdings
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Last year, Get Nice Holdings paid out 99% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its business.
When a company pays out a dividend that is not well covered by profits, the dividend is generally seen as more vulnerable to being cut.
Click here to see how much of its profit Get Nice Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by Get Nice Holdings's 10% per annum decline in earnings in the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Get Nice Holdings's dividend payments per share have declined at 4.0% per year on average over the past 10 years, which is uninspiring. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.
Final Takeaway
Is Get Nice Holdings worth buying for its dividend? Not only are earnings per share shrinking, but Get Nice Holdings is paying out a disconcertingly high percentage of its profit as dividends. It's not that we hate the business, but we feel that these characeristics are not desirable for investors seeking a reliable dividend stock to own for the long term. Get Nice Holdings doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.