Should You Buy AMMB Holdings Berhad (KLSE:AMBANK) For Its Upcoming Dividend?

Yahoo

10 hours ago

AMMB Holdings Berhad (KLSE:AMBANK) stock is about to trade ex-dividend in two days. The ex-dividend date is usually set to be two business days 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. 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 AMMB Holdings Berhad's shares before the 18th of June in order to receive the dividend, which the company will pay on the 8th of July.
The company's next dividend payment will be RM00.199 per share, on the back of last year when the company paid a total of RM0.30 to shareholders. Based on the last year's worth of payments, AMMB Holdings Berhad has a trailing yield of 5.7% on the current stock price of RM05.33. If you buy this business for its dividend, you should have an idea of whether AMMB Holdings Berhad's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
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. That's why it's good to see AMMB Holdings Berhad paying out a modest 50% of its earnings.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
See our latest analysis for AMMB Holdings Berhad
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see AMMB Holdings Berhad earnings per share are up 6.3% per annum over the last five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. AMMB Holdings Berhad has delivered an average of 2.3% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Should investors buy AMMB Holdings Berhad for the upcoming dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, AMMB Holdings Berhad looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
In light of that, while AMMB Holdings Berhad has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 1 warning sign with AMMB Holdings Berhad and understanding them should be part of your investment process.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.