DKLS Industries Berhad's (KLSE:DKLS) Dividend Will Be MYR0.03
The board of DKLS Industries Berhad (KLSE:DKLS) has announced that it will pay a dividend of MYR0.03 per share on the 15th of August. The dividend yield is 1.7% based on this payment, which is a little bit low compared to the other companies in the industry.
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It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. However, DKLS Industries Berhad's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
Looking forward, earnings per share could rise by 36.3% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 7.3% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for DKLS Industries Berhad
While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The payments haven't really changed that much since 10 years ago. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. DKLS Industries Berhad has seen EPS rising for the last five years, at 36% per annum. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 3 warning signs for DKLS Industries Berhad (1 is a bit unpleasant!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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.
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