P.I.E. Industrial Berhad (KLSE:PIE) Has Affirmed Its Dividend Of MYR0.07

The board of P.I.E. Industrial Berhad (KLSE:PIE) has announced that it will pay a dividend on the 20th of June, with investors receiving MYR0.07 per share. This means the annual payment will be 1.2% of the current stock price, which is lower than the industry average.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that P.I.E. Industrial Berhad's stock price has increased by 79% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

View our latest analysis for P.I.E. Industrial Berhad

P.I.E. Industrial Berhad's Earnings Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, P.I.E. Industrial 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 55.4% over the next year. If the dividend continues on this path, the payout ratio could be 26% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of MYR0.0333 in 2014 to the most recent total annual payment of MYR0.07. This implies that the company grew its distributions at a yearly rate of about 7.7% over that duration. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. P.I.E. Industrial Berhad might have put its house in order since then, but we remain cautious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's encouraging to see that P.I.E. Industrial Berhad has been growing its earnings per share at 11% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for P.I.E. Industrial Berhad's prospects of growing its dividend payments in the future.

P.I.E. Industrial Berhad Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think P.I.E. Industrial Berhad might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. As an example, we've identified 1 warning sign for P.I.E. Industrial Berhad that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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