AME Elite Consortium Berhad's (KLSE:AME) Upcoming Dividend Will Be Larger Than Last Year's

AME Elite Consortium Berhad's (KLSE:AME) dividend will be increasing from last year's payment of the same period to MYR0.04 on 12th of July. Despite this raise, the dividend yield of 1.2% is only a modest boost to shareholder returns.

See our latest analysis for AME Elite Consortium Berhad

AME Elite Consortium Berhad's Payment Has Solid Earnings Coverage

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, AME Elite Consortium Berhad's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 27.3% over the next year. If the dividend continues on this path, the payout ratio could be 39% by next year, which we think can be pretty sustainable going forward.

AME Elite Consortium Berhad's Dividend Has Lacked Consistency

Looking back, the dividend has been unstable but with a relatively short history, we think it may be a bit early to draw conclusions about long term dividend sustainability. The last annual payment of MYR0.02 was flat on the annual payment from4 years ago. It's encouraging to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth anyway, which makes this less attractive as an income investment.

The Dividend Has Growth Potential

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that AME Elite Consortium Berhad has grown earnings per share at 9.5% per year over the past five years. AME Elite Consortium Berhad definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

AME Elite Consortium Berhad Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that AME Elite Consortium Berhad is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. 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 AME Elite Consortium 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.