Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Haoyun Technologies Co.,Ltd. (SZSE:300448) is about to trade ex-dividend in the next four 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase Haoyun TechnologiesLtd's shares on or after the 24th of September will not receive the dividend, which will be paid on the 24th of September.

The company's next dividend payment will be CN¥0.015 per share, and in the last 12 months, the company paid a total of CN¥0.018 per share. Based on the last year's worth of payments, Haoyun TechnologiesLtd has a trailing yield of 0.7% on the current stock price of CN¥4.54. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Haoyun TechnologiesLtd has been able to grow its dividends, or if the dividend might be cut.

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Haoyun TechnologiesLtd paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run. With the recent loss, it's important to check if the business generated enough cash to pay its dividend. If Haoyun TechnologiesLtd didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. What's good is that dividends were well covered by free cash flow, with the company paying out 10% of its cash flow last year.

Click here to see how much of its profit Haoyun TechnologiesLtd paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Haoyun TechnologiesLtd reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Haoyun TechnologiesLtd has delivered an average of 4.8% per year annual increase in its dividend, based on the past nine years of dividend payments.

Remember, you can always get a snapshot of Haoyun TechnologiesLtd's financial health, by checking our visualisation of its financial health, here.

The Bottom Line

Is Haoyun TechnologiesLtd an attractive dividend stock, or better left on the shelf? First, it's not great to see the company paying a dividend despite being loss-making over the last year. On the plus side, the dividend was covered by free cash flow." It's not the most attractive proposition from a dividend perspective, and we'd probably give this one a miss for now.

Although, if you're still interested in Haoyun TechnologiesLtd and want to know more, you'll find it very useful to know what risks this stock faces. Every company has risks, and we've spotted 2 warning signs for Haoyun TechnologiesLtd you should know about.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.