Hong Leong Financial Group Berhad (KLSE:HLFG) Has Announced That It Will Be Increasing Its Dividend To MYR0.36

Hong Leong Financial Group Berhad (KLSE:HLFG) will increase its dividend from last year's comparable payment on the 21st of November to MYR0.36. Even though the dividend went up, the yield is still quite low at only 2.9%.

See our latest analysis for Hong Leong Financial Group Berhad

Hong Leong Financial Group Berhad's Dividend Forecasted To Be Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive.

Hong Leong Financial Group Berhad has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past records don't necessarily translate into future results, the company's payout ratio of 19% also shows that Hong Leong Financial Group Berhad is able to comfortably pay dividends.

Looking forward, EPS is forecast to rise by 20.6% over the next 3 years. Analysts forecast the future payout ratio could be 18% over the same time horizon, which is a number we think the company can maintain.

Hong Leong Financial Group Berhad Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of MYR0.36 in 2014 to the most recent total annual payment of MYR0.54. This means that it has been growing its distributions at 4.1% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Hong Leong Financial Group Berhad has impressed us by growing EPS at 11% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Hong Leong Financial Group Berhad's prospects of growing its dividend payments in the future.

We Really Like Hong Leong Financial Group Berhad's Dividend

Overall, a dividend increase is always good, and we think that Hong Leong Financial Group Berhad is a strong income stock thanks to its track record and growing earnings. 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.

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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 4 analysts we track are forecasting for Hong Leong Financial Group Berhad for free with public analyst estimates for the company. Is Hong Leong Financial Group Berhad not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.