Synergy House Berhad (KLSE:SYNERGY) Has Affirmed Its Dividend Of MYR0.0074

The board of Synergy House Berhad (KLSE:SYNERGY) has announced that it will pay a dividend on the 27th of March, with investors receiving MYR0.0074 per share. This means the annual payment will be 1.5% of the current stock price, which is lower than the industry average.

View our latest analysis for Synergy House Berhad

Synergy House Berhad's Projected Earnings Seem Likely To Cover Future Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Before making this announcement, Synergy House Berhad was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 169.3%. Assuming the dividend continues along recent trends, we think the payout ratio could be 11% by next year, which is in a pretty sustainable range.

Synergy House Berhad Is Still Building Its Track Record

The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Synergy House Berhad has seen EPS rising for the last five years, at 17% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Synergy House Berhad's prospects of growing its dividend payments in the future.

We Really Like Synergy House Berhad's Dividend

Overall, we like to see the dividend staying consistent, and we think Synergy House Berhad might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Synergy House Berhad stock. Is Synergy House Berhad not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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