Yahoo Finance Teck Guan Perdana Berhad (KLSE:TECGUAN) Will Pay A Smaller Dividend Than Last Year
Teck Guan Perdana Berhad's (KLSE:TECGUAN) dividend is being reduced from last year's payment covering the same period to MYR0.04 on the 12th of August. Based on this payment, the dividend yield will be 2.2%, which is lower than the average for the industry.
See our latest analysis for Teck Guan Perdana Berhad
Teck Guan Perdana Berhad's Earnings Easily Cover The Distributions
Even a low dividend yield can be attractive if it is sustained for years on end. However, Teck Guan Perdana Berhad's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
If the trend of the last few years continues, EPS will grow by 1.3% over the next 12 months. If the dividend continues on this path, the payout ratio could be 18% by next year, which we think can be pretty sustainable going forward.
Teck Guan Perdana Berhad Doesn't Have A Long Payment History
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2022, the dividend has gone from MYR0.03 total annually to MYR0.04. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.
Teck Guan Perdana Berhad May Find It Hard To Grow The Dividend
The company's investors will be pleased to have been receiving dividend income for some time. Teck Guan Perdana Berhad hasn't seen much change in its earnings per share over the last five years. While EPS growth is quite low, Teck Guan Perdana Berhad has the option to increase the payout ratio to return more cash to shareholders.
Our Thoughts On Teck Guan Perdana Berhad's Dividend
Overall, while it's not great to see that the dividend has been cut, we think the company is now in a good position to make consistent payments going into the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 3 warning signs for Teck Guan Perdana Berhad that investors need to be conscious of moving forward. Is Teck Guan Perdana Berhad not quite the opportunity you were looking for? Why not check out 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.
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