Yahoo Finance Just Three Days Till Bank Islam Malaysia Berhad (KLSE:BIMB) Will Be Trading Ex-Dividend
Readers hoping to buy Bank Islam Malaysia Berhad (KLSE:BIMB) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible 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. Meaning, you will need to purchase Bank Islam Malaysia Berhad's shares before the 15th of March to receive the dividend, which will be paid on the 5th of April.
The company's upcoming dividend is RM00.0422 a share, following on from the last 12 months, when the company distributed a total of RM0.16 per share to shareholders. Calculating the last year's worth of payments shows that Bank Islam Malaysia Berhad has a trailing yield of 6.5% on the current share price of RM02.57. 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 Bank Islam Malaysia Berhad has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Bank Islam Malaysia Berhad
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Bank Islam Malaysia Berhad paid out more than half (68%) of its earnings last year, which is a regular payout ratio for most companies.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's not encouraging to see that Bank Islam Malaysia Berhad's earnings are effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Bank Islam Malaysia Berhad has delivered 24% dividend growth per year on average over the past two years.
To Sum It Up
Should investors buy Bank Islam Malaysia Berhad for the upcoming dividend? Bank Islam Malaysia Berhad has been struggling to generate growth while also paying out more than half of its earnings to shareholders as dividends. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.
With that being said, if dividends aren't your biggest concern with Bank Islam Malaysia Berhad, you should know about the other risks facing this business. For example, we've found 1 warning sign for Bank Islam Malaysia Berhad that we recommend you consider before investing in the business.
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.