New Oriental Education & Technology Group Inc. (NYSE:EDU) stock is about to trade ex-dividend in 4 days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least one business day to settle. This means that investors who purchase New Oriental Education & Technology Group's shares on or after the 18th of November will not receive the dividend, which will be paid on the 4th of December.
The company's next dividend payment will be US$0.97 per share. Last year, in total, the company distributed US$1.20 to shareholders. Based on the last year's worth of payments, New Oriental Education & Technology Group stock has a trailing yield of around 3.8% on the current share price of US$52.52. If you buy this business for its dividend, you should have an idea of whether New Oriental Education & Technology Group's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. New Oriental Education & Technology Group is paying out an acceptable 62% of its profit, a common payout level among most companies.
See our latest analysis for New Oriental Education & Technology Group
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, New Oriental Education & Technology Group's earnings per share have been growing at 10% a year for the past five years. New Oriental Education & Technology Group is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.
Unfortunately New Oriental Education & Technology Group has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
Final Takeaway
Is New Oriental Education & Technology Group an attractive dividend stock, or better left on the shelf? Earnings per share are growing nicely, and New Oriental Education & Technology Group is paying out a percentage of its earnings that is around the average for dividend-paying stocks. We think this is a pretty attractive combination, and would be interested in investigating New Oriental Education & Technology Group more closely.
Curious what other investors think of New Oriental Education & Technology Group? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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