Hong Leong Financial Group Berhad (KLSE:HLFG) Will Pay A Larger Dividend Than Last Year At MYR0.31

Hong Leong Financial Group Berhad's (KLSE:HLFG) dividend will be increasing from last year's payment of the same period to MYR0.31 on 23rd of November. Even though the dividend went up, the yield is still quite low at only 2.5%.

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. While past records don't necessarily translate into future results, the company's payout ratio of 21% also shows that Hong Leong Financial Group Berhad is able to comfortably pay dividends.

Over the next 3 years, EPS is forecast to expand by 31.0%. The future payout ratio could be 26% 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 2012, the annual payment back then was MYR0.25, compared to the most recent full-year payment of MYR0.46. This works out to be a compound annual growth rate (CAGR) of approximately 6.3% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Hong Leong Financial Group Berhad has been growing its earnings per share at 10% a year over the past five years. 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

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 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.