Malayan Banking Berhad (KLSE:MAYBANK) Will Pay A Dividend Of MYR0.30

Malayan Banking Berhad's (KLSE:MAYBANK) investors are due to receive a payment of MYR0.30 per share on 26th of September. This will take the annual payment to 6.2% of the stock price, which is above what most companies in the industry pay.

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Malayan Banking Berhad's Dividend Forecasted To Be Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Malayan Banking Berhad has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 73%, which means that Malayan Banking Berhad would be able to pay its last dividend without pressure on the balance sheet.

The next 3 years are set to see EPS grow by 10.0%. The future payout ratio could be 73% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Check out our latest analysis for Malayan Banking Berhad

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2015, the annual payment back then was MYR0.55, compared to the most recent full-year payment of MYR0.61. This works out to be a compound annual growth rate (CAGR) of approximately 1.0% a year over that time. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.

Malayan Banking Berhad Could Grow Its Dividend

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Malayan Banking Berhad has been growing its earnings per share at 5.2% a year over the past five years. EPS has been growing at a reasonable rate, although with most of the profits being paid out to shareholders, growth prospects could be more limited in the future.

Our Thoughts On Malayan Banking Berhad's Dividend

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Malayan Banking Berhad that investors should take into consideration. Is Malayan Banking 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.