Latest news with #RM1.79
The Star
3 days ago
- Business
- The Star
IOIProp cements regional real estate push
PETALING JAYA: IOI Properties Group Bhd 's (IOIProp) latest move to take full control of Singapore's landmark South Beach development signals a bold step towards consolidating its regional real estate ambitions. Analysts see this as a strategic pivot that could both unlock value and test the developer's capital discipline. Hong Leong Investment Bank Research (HLIB Research) described the acquisition as 'a strategic and value-accretive move'. The research house said the transition from a 49.9% joint-venture stake to full ownership unlocks several key advantages – including full strategic control, operational synergies, and immediate earnings uplift. 'The South Beach assets are already income-generating, providing an immediate boost to IOIProp's earnings base and recurring income stream,' HLIB Research highlighted. 'Post-acquisition, IOIProp cements its status as one of the largest asset owners not only in Singapore, but also (as) a growing regional real estate powerhouse,' it added. HLIB Research maintained its 'buy' call on the stock with an unchanged target price (TP) of RM4.05 per share. It estimated an earnings per share uplift of 1.63 sen for IOIProp in 2026, while net gearing is expected to rise to 0.93 times from 0.7 times as of June 30, 2024. 'Despite concerns over higher gearing, the risks appear manageable given its stable recurring income, strong assets and upcoming real estate investment trust (REIT) listing plan,' HLIB Research said. TA Research took a more cautious view, noting: 'We are somewhat surprised by this acquisition, as we had earlier anticipated that the group would prioritise managing its already elevated net gearing levels.' It estimated that, if fully debt-funded, IOIProp's net gearing would climb to 0.87 times. 'IOIProp may be positioning itself for the establishment of a REIT, given its maturing investment property portfolio,' TA Research said, highlighting that it carried a total book value of RM21.3bil as of the financial year ended June 30, 2024. 'Such a move would help cushion the impact of the South Beach acquisition on IOIProp's gearing profile,' it added. TA Research reiterated its 'buy' call, with an unchanged TP of RM2.78, citing IOIProp's historical willingness to raise equity capital to fund strategic investments. Meanwhile, MIDF Research adopted a neutral stance, highlighting that IOIProp's net gearing would increase to 0.87 times post-acquisition. It acknowledged that 'the acquisition will allow IOIProp to have full control and management of the South Beach property, which is generating investment income.' MIDF Research revised its TP for the stock to RM1.79 from RM1.84, after widening the revalued net asset value discount to 65% from 64% in view of the company's higher net gearing. It kept its 'neutral' rating on the developer, citing limited near-term catalysts. IOIProp had announced that its unit, IOI Consolidated (Singapore) Pte Ltd, had signed a conditional share sale agreement to acquire the remaining 50.1% stake in Scottsdale Properties Pte Ltd, owner of South Beach, for about S$834.22mil.
Yahoo
11-04-2025
- Business
- Yahoo
Do These 3 Checks Before Buying Nestlé (Malaysia) Berhad (KLSE:NESTLE) For Its Upcoming Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Nestlé (Malaysia) Berhad (KLSE:NESTLE) is about to trade ex-dividend in the next 4 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Therefore, if you purchase Nestlé (Malaysia) Berhad's shares on or after the 16th of April, you won't be eligible to receive the dividend, when it is paid on the 15th of May. The company's upcoming dividend is RM00.74 a share, following on from the last 12 months, when the company distributed a total of RM1.79 per share to shareholders. Looking at the last 12 months of distributions, Nestlé (Malaysia) Berhad has a trailing yield of approximately 2.3% on its current stock price of RM079.12. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Nestlé (Malaysia) Berhad has been able to grow its dividends, or if the dividend might be cut. 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. If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Nestlé (Malaysia) Berhad paid out 101% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Over the past year it paid out 197% of its free cash flow as dividends, which is uncomfortably high. It's hard to consistently pay out more cash than you generate without either borrowing or using company cash, so we'd wonder how the company justifies this payout level. As Nestlé (Malaysia) Berhad's dividend was not well covered by either earnings or cash flow, we would be concerned that this dividend could be at risk over the long term. See our latest analysis for Nestlé (Malaysia) Berhad Click here to see the company's payout ratio, plus analyst estimates of its future dividends. Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Readers will understand then, why we're concerned to see Nestlé (Malaysia) Berhad's earnings per share have dropped 9.2% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls. The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Nestlé (Malaysia) Berhad's dividend payments per share have declined at 2.7% per year on average over the past 10 years, which is uninspiring. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it. Is Nestlé (Malaysia) Berhad an attractive dividend stock, or better left on the shelf? Not only are earnings per share declining, but Nestlé (Malaysia) Berhad is paying out an uncomfortably high percentage of both its earnings and cashflow to shareholders as dividends. This is a starkly negative combination that often suggests a dividend cut could be in the company's near future. It's not an attractive combination from a dividend perspective, and we're inclined to pass on this one for the time being. With that in mind though, if the poor dividend characteristics of Nestlé (Malaysia) Berhad don't faze you, it's worth being mindful of the risks involved with this business. In terms of investment risks, we've identified 1 warning sign with Nestlé (Malaysia) 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) 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. Sign in to access your portfolio
