Hong Leong Financial Group Berhad (KLSE:HLFG) Is Due To Pay A Dividend Of MYR0.20

The board of Hong Leong Financial Group Berhad (KLSE:HLFG) has announced that it will pay a dividend of MYR0.20 per share on the 27th of March. Even though the dividend went up, the yield is still quite low at only 2.9%.

View our latest analysis for Hong Leong Financial Group Berhad

Hong Leong Financial Group Berhad's Payment Expected To Have Solid Earnings Coverage

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

Having distributed dividends for at least 10 years, Hong Leong Financial Group Berhad has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, Hong Leong Financial Group Berhad's payout ratio sits at 19%, an extremely comfortable number that shows that it can pay its dividend.

Over the next 3 years, EPS is forecast to expand by 15.2%. Analysts forecast the future payout ratio could be 19% 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 MYR0.38 in 2015 to the most recent total annual payment of MYR0.54. This works out to be a compound annual growth rate (CAGR) of approximately 3.6% a year over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

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. It's encouraging to see that Hong Leong Financial Group Berhad has been growing its earnings per share at 12% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Hong Leong Financial Group Berhad Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Hong Leong Financial Group Berhad analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.