Yahoo Finance IJM Corporation Berhad (KLSE:IJM) Is About To Go Ex-Dividend, And It Pays A 4.3% Yield
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that IJM Corporation Berhad (KLSE:IJM) is about to go ex-dividend in just two days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, IJM Corporation Berhad investors that purchase the stock on or after the 15th of December will not receive the dividend, which will be paid on the 29th of December.
The company's next dividend payment will be RM0.02 per share, and in the last 12 months, the company paid a total of RM0.08 per share. Based on the last year's worth of payments, IJM Corporation Berhad stock has a trailing yield of around 4.3% on the current share price of MYR1.87. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether IJM Corporation Berhad has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for IJM Corporation Berhad
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. IJM Corporation Berhad is paying out an acceptable 72% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Thankfully its dividend payments took up just 38% of the free cash flow it generated, which is a comfortable payout ratio.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. That's why it's not ideal to see IJM Corporation Berhad's earnings per share have been shrinking at 2.7% a year over the previous five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. IJM Corporation Berhad has delivered 2.1% dividend growth per year on average over the past 10 years. Growing the dividend payout ratio while earnings are declining can deliver nice returns for a while, but it's always worth checking for when the company can't increase the payout ratio any more - because then the music stops.
To Sum It Up
Is IJM Corporation Berhad an attractive dividend stock, or better left on the shelf? The payout ratios are within a reasonable range, implying the dividend may be sustainable. Declining earnings are a serious concern, however, and could pose a threat to the dividend in future. Overall, it's hard to get excited about IJM Corporation Berhad from a dividend perspective.
With that being said, if dividends aren't your biggest concern with IJM Corporation Berhad, you should know about the other risks facing this business. For example - IJM Corporation Berhad has 1 warning sign we think you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top 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.
