Should You Buy TAS Offshore Berhad (KLSE:TAS) For Its Upcoming Dividend?

Readers hoping to buy TAS Offshore Berhad (KLSE:TAS) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase TAS Offshore Berhad's shares before the 27th of May in order to be eligible for the dividend, which will be paid on the 18th of June.

The company's next dividend payment will be RM00.01 per share, on the back of last year when the company paid a total of RM0.02 to shareholders. Looking at the last 12 months of distributions, TAS Offshore Berhad has a trailing yield of approximately 2.2% on its current stock price of RM00.905. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether TAS Offshore Berhad has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for TAS Offshore Berhad

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. TAS Offshore Berhad paid out just 6.7% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether TAS Offshore Berhad generated enough free cash flow to afford its dividend.

Click here to see how much of its profit TAS Offshore Berhad paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see TAS Offshore Berhad has grown its earnings rapidly, up 101% a year for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. TAS Offshore Berhad's dividend payments are effectively flat on where they were 10 years ago.

Final Takeaway

Is TAS Offshore Berhad an attractive dividend stock, or better left on the shelf? We like that TAS Offshore Berhad has been successfully growing its earnings per share at a nice rate and reinvesting most of its profits in the business. However, we note the high cashflow payout ratio with some concern. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.

While it's tempting to invest in TAS Offshore Berhad for the dividends alone, you should always be mindful of the risks involved. Be aware that TAS Offshore Berhad is showing 5 warning signs in our investment analysis, and 2 of those are a bit concerning...

If you're in the market for strong dividend payers, we recommend checking 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.