Tien Wah Press Holdings Berhad (KLSE:TIENWAH) Will Pay A Dividend Of MYR0.028

Tien Wah Press Holdings Berhad's (KLSE:TIENWAH) investors are due to receive a payment of MYR0.028 per share on 31st of October. This means the annual payment is 6.5% of the current stock price, which is above the average for the industry.

View our latest analysis for Tien Wah Press Holdings Berhad

Tien Wah Press Holdings Berhad Might Find It Hard To Continue The Dividend

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. The company is paying out a large amount of its cash flows, even though it isn't generating any profit. This is quite a strong warning sign that the dividend may not be sustainable.

If the trend of the last few years continues, EPS will grow by 7.7% over the next 12 months. This is the right direction to be moving, but it is probably not enough to achieve profitability. Unless this can be done in short order, the dividend might be difficult to sustain.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was MYR0.17 in 2013, and the most recent fiscal year payment was MYR0.056. This works out to a decline of approximately 67% over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

We Could See Tien Wah Press Holdings Berhad's Dividend Growing

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Tien Wah Press Holdings Berhad has impressed us by growing EPS at 7.7% per year over the past five years. It's not great that the company is not turning a profit, but the decent growth in recent years is certainly a positive sign. If the company can become profitable soon, continuing on this trajectory would bode well for the future of the dividend.

Tien Wah Press Holdings Berhad's Dividend Doesn't Look Sustainable

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The payments are bit high to be considered sustainable, and the track record isn't the best. We would be a touch cautious of relying on this stock primarily for the dividend income.

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. To that end, Tien Wah Press Holdings Berhad has 2 warning signs (and 1 which is a bit concerning) we think you should know about. 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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