Malayan Banking Berhad's (KLSE:MAYBANK) Dividend Will Be MYR0.29

The board of Malayan Banking Berhad (KLSE:MAYBANK) has announced that it will pay a dividend on the 26th of September, with investors receiving MYR0.29 per share. Based on this payment, the dividend yield will be 5.6%, which is fairly typical for the industry.

View our latest analysis for Malayan Banking Berhad

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

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Malayan Banking Berhad has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Malayan Banking Berhad's payout ratio of 74% is a good sign as this means that earnings decently cover dividends.

EPS is set to grow by 12.9% over the next 3 years. Analysts estimate the future payout ratio could reach 76% over that same time period, which is on the higher side, but certainly still feasible.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was MYR0.555 in 2014, and the most recent fiscal year payment was MYR0.60. Its dividends have grown at less than 1% per annum over this time frame. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

Malayan Banking Berhad May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Earnings per share has been crawling upwards at 2.1% per year. Malayan Banking Berhad's earnings per share has barely grown, which is not ideal - perhaps this is why the company pays out the majority of its earnings to shareholders. When a company prefers to pay out cash to its shareholders instead of reinvesting it, this can often say a lot about that company's dividend prospects.

Our Thoughts On Malayan Banking Berhad's Dividend

Overall, a consistent dividend is a good thing, and we think that Malayan Banking Berhad has the ability to continue this into the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Malayan Banking Berhad that you should be aware of before investing. 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.