Dividend lift – numbers and relative size
QFIN announced a semi‑annual cash payout of $0.07 per share, up from $0.05 per share paid for the June 2024 period – a 40 % YoY increase. At the current share price of roughly $2.30, this translates to an annualized dividend yield of ≈6.1 %, markedly higher than the modest 1‑2 % yields posted by most U.S.‑listed credit‑tech peers (e.g., LendingClub, Upstart, and SoFi, which either do not pay dividends or issue token amounts in the low‑single‑digit‑cents range). The increase not only improves QFIN’s relative yield but also signals management’s confidence that cash‑flow generation from its AI‑driven credit‑origination platform can comfortably support a more generous distribution.
Trading and valuation implications
The dividend hike lifts the stock’s attractiveness to income‑focused investors and can act as a floor for price support, especially in a market that rewards higher yields amid a risk‑off backdrop. Technically, QFIN has just broken above its 50‑day moving average (≈$2.15) and is testing the lower end of the ascending channel that began in early Q2, suggesting the dividend news could provide the catalyst needed to sustain a bounce toward the $2.50‑$2.70 resistance zone. However, investors should monitor QFIN’s Q2 cash‑conversion rate and the sustainability of its AI‑credit margin expansion; a widening payout ratio (now near 55 % of net profit) could become a red flag if earnings momentum stalls. Actionable take‑away: Consider a modest long position (or “buy‑the‑dip”) with a target of $2.60‑$2.70, placing a stop‑loss around $2.10 to guard against a reversal in earnings quality or a pull‑back in the broader tech‑credit sector. The dividend upgrade makes the trade more appealing for dividend‑yield seekers, yet it should be balanced against the company’s growth trajectory and cash‑flow outlook.