Avoid Sinomag Technology with Better Dividend Stock Options

Dividend growth is a key indicator of a company’s financial health and its ability to provide stable profits to investors. In the dividend stock space, it is very important to identify companies that have maintained or increased their dividends over the long term. Unfortunately, some companies, such as Sinomag Technology, have seen their dividends decline, making them less attractive to those looking to earn a stable investment income from dividends in the Chinese market.

Top 10 Chinese Dividend Stocks

To see the complete list of 247 stocks from our Top Dividend Stock Screener, click here.

Let’s take a look at one option that stands out from the screener results and examine the options that don’t meet the grade.

Top Picks

Jiangsu Phoenix Publishing Media (SHSE:601928)

Simply Wall St Dividend Rating: ★★★★★☆

overview: Jiangsu Phoenix Publishing Media Co., Ltd. specializes in the editing, publishing and distribution of books, newspapers, electronic publications and audiovisual products across China, with a market capitalization of RMB 29.85 billion.

operation: The company generates revenue primarily through the sale of books, newspapers, electronic publications and audiovisual publications.

Dividend Yield: 4.3%

Jiangsu Phoenix Publishing Media maintains a stable dividend yield of 4.26%, above the market average of 2.57%. With a dividend payout ratio of 45% and a cash dividend payout ratio of 70.5%, the dividend is well supported and indicates sustainability from both an earnings and cash flow perspective. Despite this, the company’s dividend performance has been unstable over the past decade, with some fluctuations. Recently, first quarter profits fell to RMB356.11 million from RMB482.96 million year-on-year, which may indicate challenges ahead.

Something to reconsider

Sinomag Technology (SZSE:300835)

Simply Wall St Dividend Rating: ★★☆☆☆☆

overview: Sinomag Technology Co., Ltd. is a global company specializing in the research, development, production and sales of permanent ferrite magnets, soft magnetic cores and components, with a market capitalization of approximately RMB 3.03 billion.

operation: The company derives its revenue primarily through the global development and sale of permanent ferrite magnets, soft magnetic cores and components.

Dividend Yield: 0.8%

Sinomag Technology Co., Ltd. faces challenges as a dividend stock, mainly due to declining dividends over the past four years, despite a reasonable dividend payout ratio of 26.8%. The company’s most recent dividend announcement of RMB2.00 per 10 shares is inconsistent with the company’s shaky dividend history and lack of free cash flow, calling into question the sustainability and reliability of future dividends. Additionally, the company’s dividend yield is low at 0.78%, which compares poorly with the top quartile of the Chinese market at 2.57%.

Where to go now?

• Click here to see the full list of 247 top dividend stocks.
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This article by Simply Wall St is general in nature. We use only unbiased methodologies to provide commentary based on historical data and analyst forecasts, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks, and does not take into account your objectives, or your financial situation. We seek to provide long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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