Hong Leong Financial Group Berhad (KLSE:HLFG) Will Pay A Dividend Of MYR0.18

The board of Hong Leong Financial Group Berhad (KLSE:HLFG) has announced that it will pay a dividend of MYR0.18 per share on the 27th of March. This takes the annual payment to 2.9% of the current stock price, which unfortunately is below what the industry is paying.

Check out our latest analysis for Hong Leong Financial Group Berhad

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

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

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 20% also shows that Hong Leong Financial Group Berhad is able to comfortably pay dividends.

The next 3 years are set to see EPS grow by 12.6%. The future payout ratio could be 21% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Hong Leong Financial Group Berhad Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the annual payment back then was MYR0.36, compared to the most recent full-year payment of MYR0.49. This works out to be a compound annual growth rate (CAGR) of approximately 3.1% a year over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

We Could See Hong Leong Financial Group Berhad's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Hong Leong Financial Group Berhad has seen EPS rising for the last five years, at 8.4% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Hong Leong Financial Group Berhad Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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 of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. 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. 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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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.