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.