Three Days Left Until Kumpulan H & L High-Tech Berhad (KLSE:HIGHTEC) Trades Ex-Dividend
Kumpulan H & L High-Tech Berhad (KLSE:HIGHTEC) is about to trade ex-dividend in the next three days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase Kumpulan H & L High-Tech Berhad's shares before the 8th of October in order to receive the dividend, which the company will pay on the 28th of October.
The company's next dividend payment will be RM00.02 per share, on the back of last year when the company paid a total of RM0.03 to shareholders. Based on the last year's worth of payments, Kumpulan H & L High-Tech Berhad stock has a trailing yield of around 5.0% on the current share price of RM00.60. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Kumpulan H & L High-Tech Berhad is paying out an acceptable 57% of its profit, a common payout level among most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It distributed 49% of its free cash flow as dividends, a comfortable payout level for most companies.
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.
See our latest analysis for Kumpulan H & L High-Tech Berhad
Click here to see how much of its profit Kumpulan H & L High-Tech Berhad paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Kumpulan H & L High-Tech Berhad has grown its earnings rapidly, up 21% a year for the past five years. The current payout ratio suggests a good balance between rewarding shareholders with dividends, and reinvesting in growth. Earnings per share have been growing quickly and in combination with some reinvestment and a middling payout ratio, the stock may have decent dividend prospects going forwards.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Kumpulan H & L High-Tech Berhad has lifted its dividend by approximately 9.9% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Is Kumpulan H & L High-Tech Berhad an attractive dividend stock, or better left on the shelf? Kumpulan H & L High-Tech Berhad's growing earnings per share and conservative payout ratios make for a decent combination. We also like that it paid out a lower percentage of its cash flow. There's a lot to like about Kumpulan H & L High-Tech Berhad, and we would prioritise taking a closer look at it.
While it's tempting to invest in Kumpulan H & L High-Tech Berhad for the dividends alone, you should always be mindful of the risks involved. To that end, you should learn about the 5 warning signs we've spotted with Kumpulan H & L High-Tech Berhad (including 1 which doesn't sit too well with us).
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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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.