APT Satellite Holdings Limited (HKG:1045) is set to trade ex-dividend in the next four days. The ex-dividend date is the day before the record date, which determines whether shareholders are eligible for a dividend payment. If you purchase APT Satellite Holdings’ shares on or after September 18th, you will not be eligible to receive the upcoming dividend, which is scheduled to be paid on October 11th.

The company’s next dividend payment will be HK$0.05 per share. In the last 12 months, APT Satellite Holdings paid a total of HK$0.22 per share. This translates to a trailing yield of 9.3% based on the current stock price of HK$2.36.

While dividends are an important source of income for many shareholders, it is crucial to assess the health of the business to determine if it can sustain these dividend payments. APT Satellite Holdings paid out 95% of its earnings as dividends, which is a higher risk, especially if the company pays out more than it earned.

It is also important to evaluate whether the company generated enough free cash flow to afford the dividend payments. APT Satellite Holdings distributed 32% of its free cash flow as dividends, which is a comfortable payout level for most companies. This indicates that the dividends are affordable from a cash perspective, but if this trend continues, there might be concerns about the sustainability of the dividend in the future.

Furthermore, APT Satellite Holdings has experienced a decline of 16% per annum in earnings over the past five years. This decline in earnings can pose a risk for dividend shareholders, as it may lead to a reduction or elimination of the dividend.

Considering these factors, APT Satellite Holdings may not be an attractive dividend stock at the moment. There seems to be a mismatch between income and cash flow, which raises concerns about the sustainability of the dividend. It is advisable to be cautious when considering this stock, especially if dividends are a primary focus.

However, if you are interested in this stock for reasons other than dividends, it is essential to be aware of the risks involved with APT Satellite Holdings. Conduct thorough research and consider the warning signs before making any investment decisions.