Regular readers will know that we love our dividends at Simply Wall St, which is why it’s exciting to see CI Holdings Berhad (KLSE:CIHLDG) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to appear on the company’s books to be eligible for dividend payments. The ex-dividend date is an important date to be aware of because any purchases of stock made on or after this date may mean late settlements that are not reflected on the record date. In other words, investors can buy CI Holdings Berhad shares before September 21 to be eligible for the dividend, which will be paid on October 10.
The company’s next dividend payment will be RM0.15 per share, and in the last 12 months, the company paid a total of RM0.15 per share. Looking at the last 12 months of distributions, CI Holdings Berhad has a trailing yield of approximately 4.5% on the current stock price MYR3.36. We love to see companies pay dividends, but it’s also important to make sure that laying the golden eggs won’t kill our golden goose! As a result, readers should always check whether CI Holdings Berhad has been able to grow its dividends, or whether the dividend might be cut.
View our latest analysis for CI Holdings Berhad
Dividends are usually paid from company earnings. If a company pays dividends that exceed its profits, the dividend may be unsustainable. CI Holdings Berhad paid out only 24% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. Yet cash flow is usually more important than profit when assessing dividend sustainability, so we should always check whether the company generated enough cash to afford its dividend. Fortunately, it paid out only 44% of its free cash flow last year.
It’s positive to see that CI Holdings Berhad’s dividend is covered by both profits and cash flow, as this is generally a sign that the dividend is sustainable, and a lower payout ratio usually gives a larger margin of safety before the dividend gets cut. suggests.
Click here to see how much of its profit CI Holdings Berhad paid out in the last 12 months.
Are earnings and dividends growing?
Businesses with strong growth prospects are usually the best dividend payers, as it is easier to grow the dividend when earnings per share are improving. If earnings decline significantly, the company may be forced to cut its dividend. It’s encouraging to see that CI Holdings Berhad has grown its earnings quickly, up 26% per year over the last five years. Earnings per share are growing very quickly, and the company is paying out a relatively low percentage of its profits and cash flow. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, because the company can grow its earnings and increase its earnings percentage, which can essentially increase the dividend.
Many investors will assess a company’s dividend performance by evaluating how much dividend payments have changed over time. Over the past seven years, CI Holdings Berhad has increased its dividend by an average of about 17% per year. It’s exciting to see that both earnings and dividends per share have grown rapidly over the last few years.
Does CI Holdings Berhad have what it takes to maintain its dividend payments? CI Holdings Berhad has grown its earnings per share as it reinvests in the business. Unfortunately it has cut the dividend at least once in the last seven years, but the conservative payout ratio makes the current dividend sustainable. Overall we believe this is an attractive combination and worthy of further research.
Although it is tempting to invest in CI Holdings Berhad just for the dividends, you should always be aware of the risks involved. For example – CI Holdings Berhad has 1 warning sign We think you should know about it.
In general, we wouldn’t recommend buying the first dividend stock you see. is here A curated list of interesting stocks that are strong dividend payers.
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This article from Simply Wall St is of a general nature. We only provide commentary based on historical data and analyst forecasts using unbiased methodology and our articles are not intended to provide financial advice. It does not recommend buying or selling any stock, and does not take into account your objectives, or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.