Aeon (M) Bhd (KLSE:AEON) Will Pay A Larger Dividend Than Last Year At MYR0.045

Yahoo

29-04-2025

The board of Aeon Co. (M) Bhd. (KLSE:AEON) has announced that it will be increasing its dividend by 13% on the 19th of June to MYR0.045, up from last year's comparable payment of MYR0.04. This will take the dividend yield to an attractive 3.1%, providing a nice boost to shareholder returns.
We've discovered 1 warning sign about Aeon (M) Bhd. View them for free.
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. The last dividend was quite easily covered by Aeon (M) Bhd's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.
Looking forward, earnings per share is forecast to rise by 43.9% over the next year. If the dividend continues on this path, the payout ratio could be 33% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for Aeon (M) Bhd
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the dividend has gone from MYR0.05 total annually to MYR0.045. This works out to be a decline of approximately 1.0% per year over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Earnings have grown at around 3.2% a year for the past five years, which isn't massive but still better than seeing them shrink. Growth of 3.2% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.
Overall, this is a reasonable dividend, and it being raised is an added bonus. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Aeon (M) Bhd that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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