29-05-2025
Tien Wah Press Holdings Berhad (KLSE:TIENWAH) Has Affirmed Its Dividend Of MYR0.028
The board of Tien Wah Press Holdings Berhad (KLSE:TIENWAH) has announced that it will pay a dividend of MYR0.028 per share on the 31st of July. The dividend yield will be 6.6% based on this payment which is still above the industry average.
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While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Tien Wah Press Holdings Berhad was earning enough to cover the dividend, but it wasn't generating any free cash flows. No cash flows could definitely make returning cash to shareholders difficult, or at least mean the balance sheet will come under pressure.
Over the next year, EPS could expand by 39.6% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 37%, which is in the range that makes us comfortable with the sustainability of the dividend.
See our latest analysis for Tien Wah Press Holdings Berhad
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the annual payment back then was MYR0.06, compared to the most recent full-year payment of MYR0.056. Dividend payments have shrunk at a rate of less than 1% per annum over this time frame. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Tien Wah Press Holdings Berhad has impressed us by growing EPS at 40% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Tien Wah Press Holdings Berhad could prove to be a strong dividend payer.
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Tien Wah Press Holdings Berhad's payments, as there could be some issues with sustaining them into the future. While Tien Wah Press Holdings Berhad is earning enough to cover the payments, the cash flows are lacking. We would be a touch cautious of relying on this stock primarily for the dividend income.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 3 warning signs for Tien Wah Press Holdings Berhad that investors need to be conscious of moving forward. Is Tien Wah Press Holdings Berhad not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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